Arnon Ltd (IOM) v Beierwaltes

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Arnon Ltd (IOM) v Beierwaltes 2017 NY Slip Op 31605(U) August 1, 2017 Supreme Court, New York County Docket Number: 650371/2013 Judge: Marcy Friedman 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. [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 1] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 SUPREME COURT OF THE ST ATE OF NEW YORK COUNTY OF NEW YORK- PART 60 x Index No. 650371/2013 ARNON LTD (IOM), Plaintifl: Decision/Order - against···· WILLIAM BEIERW ALTES, Lr'NDA BEIER WALTES, PHOENIX ANCIENT ART S.A., HICHAM ABOUTAAM AND ALEXANDER GHERARDI, Defendants" x This is a breach of contract action based on defendants' alleged wrongful refusal to sell an ancient Greek statue-a Kore-to plaintiff Amon Ltd (IOM) (Amon). Defendants William Beierwaltes, Lynda Beierwaltes, Phoenix A.ncient Art S.A. (Phoenix), and Hicham Aboutaam move (in Motion Seq. No. 4), pursuant to CPLR 3212, for summary judgment dismissing the complaint and awarding them jud!:,rment on their first counterclaim for a declaratory judgment and their sixth counterclaim for damages allegedly incurred as a result of a preliminary injunction previously issued in this case, Plaintiff cross-moves for leave to a.mend the complaint to add David Sofer as a plaintiff i Plaintiff separately moves (in Motio~1 Seq, No, 5), pursuru1t to CPLR 3212, for summary judgment awarding plaintiffjudgment on its first and second causes of action i(n breach of contract and replevin, respectively, and dismissing defendants' first counterclaim for a declaratory judgment, second counterclaim fur breach of contract, sixth 1 The cross-motion also seeks leave w amend to "reflect[] that Gherardi is no longer a party." By stipulation dated June 18, 2015, plaintiff dlscontinued all claims against defendant Gherardi without prejudice. 1 2 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 2] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 counterclaim for damages from the prelirninary injunction, and seventh through tenth counterclaims fbr conversion, unjust enrichment, quantum memit, and breach of contract stemming from a separate transaction. Plaintiff Amon is "a corporation duly organized and existing under the lavvs of the Isle of Man and resident in the fsle of Man." (Joint Statement of Material Facts [Joint Statement] ~i l.) Amon is "mvned by Amon River Trust [Amon Trust], a trnst organized and existing under the laws of the Isle of Man and resident in the Isle of Man, which \.vas settled by, and for the benefit of, David Sofer." (Joint Statement~ L) The alleged "sole purpose" of Amon "is to own the artwork collection of David Sofer." (CompL 4]' 2.) 2 As attested by Mr. Sofer, and not disputed by defendants, :Nk Sofer is not an employee, officer, or director of Amon; rather, Amon is controlled by "independent directors who act in their discretion." (Aff. of David Sofer, dated July 29, 2015, ii 2 [7/29/15 Sofer Aff.].) These directors are Marion Louis de Carte and Gordon Mundy. (de Carte Dep. at 6-8 [Bergman Aff, Exh, K].) Ms. de Carte is an employee, and Mr. l'v1tmdy is a director, of Trident Trnst Company (Trident), another Isle of Man corporation, which serves as the trustee to Amon Trust as \Vell as the secretary of Amon. (Id. at 11~12, 15. )3 The Beiernraltes are residents of Colorado and owners of the Kore. (Joint State.m.ent ii 5.) "At all relevant times, Phoenix was the agent of the Beierwaltes with full and exclusive power to enter into a contract for, and conclude a sale of, the Kore." (Id.~ 6.) Phoenix is a Swiss 2 One ofArnon's directors, Ms. Marion Louis de Carte testified that Amon's "corporate purpose" is "far broader than just owning fixed assets or antiquities. It owns property and it has a large invesiment portfolio." (de Carte Dep. at 66:15-18 [Bergman Aff, Exh. Kl) 3 The court notes that neither party submits relevant documents regarding the governance of either Amon or the Amon Trust Ms. de Carte testified tha! Amon "has a Memorandu:m and Articles of Association.'' (de Carte Dep. at 66:2~3 ,) 2 3 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 3] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 corporation and resident in the Canton of Geneva. (Id.~ 2.) At the time of the disputed sale, Phoenix's agent in New York was Petrarch LLC, d/b/a Electrum, (Id,~ 3.) Mr. Hicham Aboutaam and Mr, Gherardi "were employees of Electrnm," (Id. ~ 4.) It is undisputed that on or about January 4 or 5, 2013, ML Sofer visited Phoenix's New York gallery and offered to purchase the Kore. (ff Aboutaam Aff. 4! 9 [Bergman .Aff., Exh. F]; Sofor Dep. at 96:4-97:14 [Bergman Aff, Exh. L].) No agreement was reached that day; but both Mr. Sofer and Mr. Aboutaam testified that by the end of the weekend, they settled on a purchase price of$650,00CL (Sofer Dep. at 96:14-97:18; H. Aboutaam Dep. at 80:9-81:23 [Bergman Aff, Exh. MJ,) The parties sharply dispute the details of the conversations that took place between Mr, Sofer and ML Aboutaam regarding the tem1s of the sale. Their dispute center~ on whether Mr. Aboutaam "stress[ed] that time 'vould be of the essence," and whether Mr. Sofer agreed to pay within four days. (H. Aboutaam Aff ii 9; Sofer Aff., dated Feb. 25, 2013, ~[ 14 [2125/13 Sofer Aff] [Bergman Aff., Exh. Il) In the period between January 10, 2013 and January 22, 2013, the pruties engaged in extensive communications by email as to the time for payment, the identity of the party to which payment would be made, wiring instructions, and the need for written documentation including a formal agreement and invoice. These emails commenced with a January 10 email from Ms" Beienvaltes to Mr, Sofer at bis personal email address, stating that 'Tm so pleased you are buying our wonderful kore," and that "Hicham f.Aboutaam] has total [sic] me you will be wiring funds within four days of receipt of invoice .... " (Bergman Aff, Exh. HH.) This email was followed by an email from Mr. Sofor io Ms. Beierwaltes, dated January 12, 2013, which was copied to Mr. Hicham Ahoutaam and :tvls. d.e Carte, and which stated in full: 4 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 4] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 "Hi Lynda, Amon Ltd. (IOM), is part of my trust and is managed by independent directors, It will be easier and faster if all the logistics of the sale (formal short agreement, invoice with photos etc.) be done by Phoenix Ancient Art and Hicham Aboutaarn. l will send Hicham a copy of this email, and ask him to take care of it. It is Amon Ltd, [sic] intention that your wonderful Kore will be exhibited for a long terrn at tht.~ Metropolitan Museum in Ne\v York Thank you for your email. I hope that 'vvhen you and biU come to London 1 will have the opportunity to meet you and to show you my collections. Best wishes, David" (Bergman Aff, Exh. 1\i\ [format in original_J.) These emails were followed by emails further discussing the terms. (Id., Exhs. JJ, II, X; Gette Aff., Exh. L) By email dated January 25, 2013, from Hicham Aboutaam to rv1r. Sofer, entitled "Sale Cancellation," Mr. Aboutaam informed Mr. Sofor "that the sale is cancelled because the conditions have not been met" (Bergman Aff, Exh, Z.) The unsatisfied conditions \Vere not specified. This action was commenced shortly aJlenvard, on or about February 4, 2013. In moving for summary judgment dismissing plaiutiff's breach of contract cause of action, defendants contend, as a threshold matter, that ML Sofer did not have authority to enter into a contract for the Kore, and that Amon never ratified the contract (Deis.' Memo. In Supp, at l ~6, ) In the alternative, defendants contend that plaintiff and defendants never reached a 4 4 ln the email exchange by 't'ihich the parties discussed ihe terms of the sale, defendants did not challenge Mr. So for' s authority w enter into the contract 4 5 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 5] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 meeting of the minds on "the time and method of payment" or that, if a contract vvas made, it was cancelled for breach of the payment terms. (Id. at 6-9 .) 5 In opposition to defendants' motion and in suppo11 of its mvn motion for summary judgment on its breach of contract cause of action, A.men does not dispute that "Sofer did not have formal agency pcn,vers for Amon generally," (PL 's IVIemo. In Opp. at 6.) Rather, Amon contends that "in this one instance, Sofer had authority to bind Arnon." U~t at 5.) Amon claims that "questions of implied actual and apparent authority are relevant in cases such as this one when there is no express appointment of the agent" (kL at 6.) In addition, Amon contends that the parties reached an agreement on material terms, that Mr, Sofrr never agreed to a four day deadline and, alternatively, that any such deadline was waived. (Id. at 11-18.) The standards for summary judgment are well settled. The movant must tender evidence, by proof in admissible form, to establish the cause of action "sufficiently to vvarrant the court as a matter oflaw in directing judgment" (CPLR 3212 [b]; Zv£l<:~rrna..ri._y_q1y___QfN~_,Y_Xsn:~, 49 NY2d 557, 562 [1980].) •'Failure to make such showing requires denial of the motion, regardless 851, 853 [1985.J.) Once such proof has been oflercd, to defeat summary judgment "the opposing party must 'shovv facts sufficient to require a trial of any issue of fact' (CPLR 3212, subd. [b])." (Zrn;J~gnn.@, 49 NY2d at 562.) "On a motion for summary judgment, facts must be viewed in 5 In this decision, Defa.' Memo. In Supp. and DefS.' Reply Memo. refer to memoranda of law submitted by defendants in connection with defondants' own motion for summaryjudgment (Motion Seq. No. 4). PL's Memo. In Opp. refers to platntiff's memorandum in opposition to defendants' motion. PL 's Memo. In Supp. and Pl. 's Reply Memo. refer to memoranda of lmv submitted by plaintiff in connection with plaintiff's own motion for summary judgment {Motion Seq. No. 5). Defa.' Memo. In Opp. refers to defendants' memorandum in opposition to plaintiff's motion. 5 6 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 6] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 the light most favorable to the nmHnoving party." CY~_gJ1_ _y__l~~-~tgnL(:_QJJ,~~LJ~.9{1~\, 18 NY3d 499, 503 [2012] [internal quotation marks and citation omitted].) "fl]ssue-finding, rather than issuedetem1i11ation, is key. Issues of credibility in particular are to be resolved at trial, not by summary judgment." CSh~nir9_y_J:jgµ~~Y<lr4J:r.P.µ~_, _ (Qfp,_, 70 AD3d 474, 475 [1st Dept 2010], citing SJ~.J~01~~J~rtAl?g~~,,,Jn~_,_yJ!lQ[?~_,Mfa,_ (:9_rg,, 34 NY2d 338, 341 [l 97 4] [other internal citations omitted].) It is further settled that "[a] principal-agent relationship may be established by evidence of the consent of one person to allow- another to act on his or her behalf and subject to his or her control, and consent by the other so to act, even \Vhere the agent is acting as a volunteer!' (Art fig,__ _f(,lft11,\'3t:;,_LL.~~J1J~~hri.$Ji~~~JitQ,_, 58 AD3d 469, 471 [1st Dept 2009] [internal quotation marks and citation omitted].) Agency may be based on actual or apparent authority of the agent to act on behalf of the principaL Actual authority, in tum, may be based on an express or direct grnnt of authority to the agent or may be implied based on the principal' s "manifostations \vhich, though indirect, would support a reasonable inference of an intent to confor such authority." (Q.rn.~;rr~__yJ:kUm@, 51NY2d197, 204 [1980].) Implied actual authority must be based on a showing that the principal "performed verbal or other acts that gave [the agent] the reasonable impression that he had authority to enter into the [contract]." (~Ht~__ fj_y_~_Ji_g_µ~-~.P~Y:___f)Jrt~L(\?DL vt:~t~ty_g.f.f!.liUQ_Qk, 112 AD3d 479, 480 [1st Dept 2013],) Apparent authority must be based on "words or conduct of the principal, communicated to a third party, that give rise to the appearance and belief that the agent possesses authority to enter into a transaction. The agent cannot by his own acts imbue himself,vith apparent authority." (H~iliPclLYSt§!~__Qf.N.~1Y.X2rk, 64 NY2d 224, 231 [1984].) "Moreover, a third party with whom the agent deals may rely on an appearance of authority only to the extent that such reliance is reasonable." (Id.) 6 7 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 7] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 As the Court of Appeals has explained: "As with implied actual authority, apparent authority is dependent on verbal or other acts by a principal which reasonably give an appearance of authority to conduct the transaction, except that, in the case of implied actual authority, thf.:se must be brought home to the agent while, in the apparent authority situation, it is the third party 1vho must he aware of them." (Greene, 51 NY2d at 204.) A.mon and defendants agree that the issue of whether I\.1r. So for had authority to enter into a contract for the Kore on behalf of Amon is one of law for the court. (Oral Argument Transcript at 8-9.) In claiming that Mr. Sofer lacked authority to enter into the contract, defendants cite extensive deposition testimony from both Mr. Sofor and Ms, de Carte in which they repeatedly confirmed that Mr. Sofer recommended purchases but that only Amon had the authority to contract for the purchases. Specifically regarding the purchase of the Kore, Mr. Sofer testified: «Q. Who made the de ...;ision that Arnon would buy the Kore? A The trustees. Q. \\-'hat was your role in that decision? A. Recommending them to buy it." (Sofer Dep. at 18:6-10.) This testimony was consistent "'ith Mr. Sofer's testimony about past purchases of antiquities, in which he repeatedly stated that he made recommendations to Ms. de Carte, but that Amon or the Arnon directors did the buying. 6 6 Mr. Sofor's testimony as to past purchases included: 7 8 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 8] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 Mr. Sofer was also asked several general questions abqut his authority and testified consistently as follm.vs: "Q. Can you tell the trustees what to do? A No. Q. Is it correct to say that the only thing you can do with respect to these trusts is put things in them? A. I can recommend or express my \Nish. Q. Do the trustees listen? A. Sometimes." (Sofor Dep. at 13:20-14:3.) In an affidavit, Mr. Sofer similarly stated: "I provide the assets that the Trust uses to acquire artwork through Amon, but the trustees who oversee A.mon are independent." (Sofer AiI, dated Feb. 4, 2013, ~ 5 [2/4/13 Sofer Aff.] fBergman Aff, Exh, L) He also averred that "Amon is owned by a tmst of which my family and 1 are beneficiaries, Amon has independent directors who act in their discretion. But, because my recommended acquisition of antiquities reflects my tastes and interests, they have never refused to purchase any items 1 have recormnended." (7/29/15 Sofer Aff o11> & & e @ >11> & ~ & ii 2.) ''Q. \Vho was involved in the purchase of it; you? A. I don't know what you mean involved. I definitely recommended to Amon to buy it. ... Amon paid for it." (Sofer Dep. at 32:2 l33 :3); "Q. Who did the buying; you? A. Amon. Q. Who did the shopping? A. J was doing the recommendation. The shopping was done by Amon. Q. \Vl10 negotiated the deal? A. I am sure I helped. Q. \.Vho else was involved and who did you help? A. Marron de Cmte. Q. Who decided to by [sic] this stuff'? A. Marion de Carte. Q. 1t was her decision? A. Yes. Q. Did you make a recommendation to her? A Yes." (id. at 37:20-38: 11); "Q. \Vho did the buying? A. Amon .... A. l recommended after consulting .... A. With experts." fig., at 40: 11-17); "Q. Which human being on behalf of Amon made the buy? A. l recommended it." (ifl at 52:9-10); "Q. Who did the buying, you? A. Amon .... A. 1 recommended it to Amon." (id. at 59:812); "Q. \.Vhich human being did the buying? You? A. I was the person who visited the gallery and recommended it to my trustees to buy it" Ci9.'. at 60:10-12); "Q. Did Amon buy these pieces? A. Yes .... A. The buying was done by Amon directors and the recommendation was done by me." (id. at 61:21-62:6); "Q. Who is the human being who did the buying of these pieces; you? A. I don't do the buying. Amon did the buying and l did the reconm1endati01L" (j1L at 68:21-24); and "Q. \Vho made the purchases at the auctions, Ms. de Carte or Mr. Gordon? A. Arnon directly. Q. Who was the human being who went and participated in auctions to buy Arnon's holdings? A. Amon never goes to an auction, and rnyselfse!dom. Sometimes, but mostly it's done over the phone or in a pre-bid. Q. When it's done on the phone or in a pre-bid, who is on the other end of the phone and who is making the bid? A. Mostly myself." (id. at 21:9-20.) 8 9 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 9] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 Ms, de Carte's testimony supports Mr. Sofer's testimony that he recommended but could not direct purchases. She testified that her position at A.mon as director "entails entering into agreements, [and] vvriting up Minutes, making payments, general administration," (de Carte Dep. at 15:22-16:4} She also testified that she signs contracts on behalf of Amon (i~t,- at 17: 17) and, "\Vith respect to the terms, is "guided by David Sofer" (id. at 16:12) or "take[s] some guidance from David Sofer from time to time." (Id. at 17:5-6.) She insisted, however, that she "would never just sign something if something's placed in front of me ... I \Vould ahvays read it and apply my mind to it." (Id. at 18:1~3.) Ms. de Carte acknowledged that her position as trust and company administrator at Trident (the trustee of A.mon Trust and the secretary of Amon), is "clerical" in nature (id. at 11:24-12:4, 15:19-16:4, 19:22-24); that ML Sofor, not she, has the expertise in antiquities (id. at 37:7-9); and that he would advise Amon regarding which antiquities to acquire. (Id. at 36:20~ 23.) Like Ivlr. Sofer, Ms. de Carte testified that she could not recall an instance when Amon had turned dovm one of Mr. Sofor's recommendations. (Id. at 36:24-37:2.) She denied, however, that l\/Ir. Sofer had the power to contract on behalf of Amon (id, at 56: 14~ 16), and further explaim~d that for a payment for a purchase to be authorized, the request must first be checked by "Compliance" and must then be approved by two of ten authorized signatories and, if the purchase is over£ 50,000, by the compliance manager. (Id. at 31: 18-32:21.) \V11en explicitly asked by defendants' counsel \~rhether the signatories' decision to sign or not was "discretionary with these ten people," she initially nodded in agreement. To the follow-up question "So nobody can instruct them to sign?," she responded "Correct." To the fortht~r question "'All right. So the answer is, yes, it's within their discretion, they do hold fiduciary positions and they have to act responsibly," she answered "Con-ect" (Id. at 35:24-36: 19,) 9 10 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 10] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 As to the purchase of the Kore in particular, J\tJs. de Carte was asked the following question: "But there hadn't been, if l understand your testimony correctly, ... any decision on the part of Arnon to actuaHy acquire this piece?" (Id. at 57:3-5.) She responded: "Amon would have acquired the piece had we had an invoice and documents to back it up. We knew that the intention \Vas there to buy it" 0_4, at 57:7-9.) She then gave the following testimony: "Q. But was there a contract to buy it? Did Amon agree that it was going to pay this money?" ;'A. I didn't see a contract ... The answer is no, 1 didn't see a contract." (Id. at 57:11-12, 58:1-7.) 7 In claiming that Mr. Sofer was authorized to enter into the contract for the Kore on Arnon's behalf: Amon does not dispute this testimony. Nor does Amon contend that express authority to acquire the Kore '"'as conferred by Amon upon Mr. Sofer. Rather, as noted above, Amon argues that "in this one instance, Sofer had authority to bind Amon." (PL 's Memo. In Opp. at 5.) In support of this contention, Amon relies on the January 12, 2013 email and on prior dealings between the parties. The January 12 email (Bergman Aff., Exh. AA, quoted supra at 4) from Mr. Sofer to Ms. Beierwaltes \Vas copied to Mr. Hicham Aboutaam and Ms. de Carte at congratulating Mr. Sofer on buying the Kore, IVk So for advises her that .Aunon is part of his trust and is managed by independent directors, and that the sale should he made by Phoenix to Amon. Amon contends that Ms. de Carle' s "non-response" to the email "was suffich.~nt to cloak Sofer with authority for this transaction." (PL 's Memo. In Opp. at 6.) 7 Plaintiff contends that Ms. de Carte's "layman's opinion" as to Vihat constitutes a contract should not be considered. (Pl. 's Memo. In Opp. at 4.) The court considers this testimony not for any legal conclusion by Ms.. de Carte as to whether a contract was made, but rather as a statement of fact that Ms. de Carte did not see a wriiten contract document 10 11 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 11] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 In discussing the effect of l\t1s. de Carte's silence in response to the email, Amon does not distinguish between implied actual authority and apparent authority, and does not cite legal authority on the effect of such silence on these separate bases for authority. There is case law that silence may, under appropriate circumstances, manifest authority, although New York law on this issue does not appear to be extensive. (See Restatement [Third] of Agency § 1.03, Comment b. [2006] [stating that a manifestation of the principal' s assent to the agent may create implied actual or apparent authority, and that "[s_Jilence may constitute a manifestation \vhen, in light of all the circumstances, a reasonable person would express dissent to the inference that other persons \Vill draw from silence. Failure then to express dissent \Yin be taken as a manifestation of affim1ance"]; see also HJnfilr.~~.'!-J*i:l1Jm1_§,_,JY_y __SmitkLSY-:l,__ Tnmf:'J:b.Jni.:.,, 640 Fed Appx 49, 52 [2d Cir 2016] [citing Nev,1 York law on creation of apparent authority].) Here, however, the silence of Ms. de Carte in response to the January 12 email is insufficient as a matter of law to manifest either implied actual or apparent authority. Ms. de Carte is neither directly addressed in the email, nor identified as a representative of Amon. The email address used for Ms. de Carte is a Trident, not Amon, address, and there is no indication in the email that Trident and Amon are interrelated entities. As defendants correctly point out, "there is nothing on the face of the email to connect Ms. de Carte with Amon." (Defa.' Reply Memo. at 4.) Further, the email does not detail the terms of the sale of the Kore, and it affirmatively states that Arnon is part oflvir. Sofer's trust and is managed by independent directors. Ms. de Carte's failure to respond, within a very sh.oft time frame, to such an email could not have led a reasonable person in defendants' position to conclude that Ms. de Carte, and 11 12 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 12] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 through her, A.mon, bestowed on 1\k Sofor the authority to bind Amon to a $650,000 contract. 8 Ms. de Carte's silence in response to the January 12 email thus fails to raise a triable issue of fact as to apparent authority. Ms. de Carte's silence in response to this email similarly fails to raise a triable issue of fact as to Amon's claim that Amon bestowed implied actual authority on Mr. Sofer frn the one Kore transaction. As discussed at length above (supra at 7-10), Mr. Sofer and Ms. de Carte repeatedly testified that fvk Sofer recommended purchases but that only Amon had the power to contract for them, and that formal approval was required. In the face of this testimony, Ms. de Carte's non~response to the January 12 email could not have given Mr. Sofer "the reasonable impression" that he had authority to enter into this one contract (See ~H~J'..iY~.J:Jgµt?,J)~y,_.fµnl:i ('..QI12.c, 112 i\D3d at 480.) 9 At most, Ms. de Carte's silence could be interpreted as manifesting "Although not binding on this comt, Bgr:li~~r..Y(IQ~~l@9Ji;s!i;ntL~~Yi!li!5..B9!!lf (886 F Supp 325, 330 [SD NY i 9941) is instructive. There, the Comi, applying New York law, found that the third party, who was experienced in his field, had not "sufficiently allege[dJ that he had any justifiable reason outside of [the agent's] own statements for believing that [the agent] had been placed in a position that empowered him to unilaterally bind [the principal]." The agent had notified the third party of the existence of an Executive Cornmirtee and the need for its approval before the transaction could take place. ln granting summary judgment dismissing a breach of contract claim brought on an apparent authority theory, the Court concluded: "Even taking [lhe third party's] allegation that fthe agent] led him to believe that the Executive Committee would rubber stamp [the agent's] recommendation on its fac:e, no reasonable person, lei alone experienced [person in the industry], could conclude that [the agent] could hind [the principal] to the bid without Executive Committee approval." On similar facts, !his court reaches the same result. 9 Amon argues that rather than responding to the January 12 email by telling Mr. Sofer or defendants "to ·wait" until the directors formally approved the purchase, "[d]e Caiie took only one step in response to this email: she contacted a colleague who was updating Amon's schedule of antiquities to alert him to be aware t.hat there was 'another asset' on the way." (PL 's Memo. In Opp. at 5, citing de Carte Dep. at 53; see email from de Carte to Munusami, Veekesh [Trident's accountant], dated January i 4, 2013, with no text but su~ject line entitled "FW: In voice for Terra Cotta Kore" [Bergman Aff., Exh. BBJ linternal email],) To the extent that Amon contends !hat this internal coimm.tnicaticm manifested to Mr. Sofer that Amon gave him authority to purchase the Kore, this contention is also unavailing. l'vk Sofer was not copied on the internal email, and there is no claim that he was aware that the Januai·y 12 email had been forwarded. Moreover, the accountant \Vas not among the individuals identified by Ms. de Caste as those with authority to approve a contract for a purchase. {de Caiie Dep. at 31-34.) In any event, although the internal email supprnts Ms. de Carte's testimony, discussed above, that Amon would have purchased the Kore if it had had proper documentation, the email does not negate Ms. de Carte's and Mr. Sofer's repeated testimony that a formal approval process by Arnon was required in order to make a purchase. 12 13 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 13] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 agreement that 1vir. Sofer \Vas authorized to engage in intermediary discussions or negotiations, but that the independent directors reforred to in the January 12, 2013 email must still make the final decision as to '>vhether to bind Amon to the purchase and must approve a formal written contract 10 Amon\ reliance on prior dealings is also insufficient to raise a triable issue of fact as to Mr. Sofer's apparent authority to bind.Arnon to the one Kore transaction. As a general rule, "[t_lhe mere creation of an agency for some purpose does not automatically invest the agent with 'apparent authority' to bind the principal without limitation. An agent's power to bind his principal is coextensive with the principal's grant of authority." 0".9.r.4.x.:VnMyJ:~Q~J\, 32 NY2d 464, 472 [1973] [internal citations omitted].) Further, "the existence of 'apparent authority' depends upon a factual showing that the third party relied upon the misrepresentations of the agent because of some misleading conduct on the part of the principal···---not the agenL" (Id. at 4 73; accord H0:.ll2£1f, 64 NY2d at 231.) Amon asserts that defendants '"knew from previous experience that Sofer conducted business through Amon." (Pl.'s Memo. In Opp. at 7.) This vague assertion is not supported by any evidence that Amon at any time made a representation or otherwise engaged in misleading conduct that gave any of the defendants the impression that Mr. So for .had the authority not merely to negotiate transactions but also to bind Amon to purchases. 1 i 10 "Parties routinely allow brokers, attorneys, or other third parties to negotiate deals without granting the negotiators the authority to bind them." (Ernn0m!§t'.»A~h'.QS'.!!1~,J,,J,,G"yJ;~Q~~DiJi.Y.~.Am.(9q;;,, 2004 WL 728874, *6, 2004 US Dist LEXIS 5649, *7 [SD NY, No. 01Civ.9468, Apr. 6, 2004]; see 1.Q~-~--(Q.UL.Y._~_rm~~, 174 AD2d 415, 4 l 7 fl st Dept J991] [holding ihat a broker lacked apparent or actual authority to bind a seller, where the broker was "authorized to enter into negotiations but not authorized to seH or convey the apartments"].) u Amon does not submit any details as to tbe representations made during prior transactions as to the scope of ML Sofer's authority w act on behalf of Amon. Moreover, as stated by Mr. Aboutaam, and not disputed by plaintiff, Phoenix did not enter into any transactions with 1V1r Sofer between approximately 2002 and January 20 i 3, (AfI of 13 14 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 14] INDEX NO. 650371/2013 NYSCEF DOC. NO. 279 RECEIVED NYSCEF: 08/01/2017 To the extent that Arno.n further contends that defendants are bound because they failed to ask Mr. Sofer or Amon for confirmation that Amon had formally approved the contract for the Kore (see PL 's Memo. In Opp. at 7), this contention is unavailing. Amon cit.es no authority that a defendant has an obligation to "'make the necessary effort to discover the actual scope of rthe agent's] authority" absent a factual showing-which is lacking here-"that the third party relied upon the misrepresentations of the agent because of some misleading conduct on the part of the prindpaL ... " (See Ford, 32 NY2d at 472~473.) Nor does Amon cite prior dealings with Mr. Sofer sufficient to raise a triable issue of fact as to whether he had implied actual authority to bind Ar.non to the purchase of the Kore. There is legal authority that prior dealings between a principal and an agent may be relied upon to establish an agent's authority to perform similar acts in the future. (See eog, Restatement [Third] of Agency§ 1.03, Comment e r1006_] ["Between particular persons, prior dealings or an ongoing relationship frame the context in which manifestations are made and understood"]; Restatement [Second] of Agency § 43 [2] [1958] ("Acquiescence by the prirn.:ipal in a serif.~s of acts by the agent indicates authorization to perform similar acts in the fot.ure"]; ijt=;_~t1i~__ y_p_~14':r\Yt1?:~, by circumstances, and among others the recognition by the defendant [principal] of acts on his [the agent's] part similar in character to those in controversy"]; ~J~,µn__y__QQQ_g:1._~:in, 251 AD 84 [4th Dept 1937] ["[W]here an agency is sought to be established by a prior course of dealing, such conduct determines the extent of the agency as vlell as its existence"],) In claiming implied actual authority based on prior dealings, Amon relies merely on the H. Abomaam 4[ 5 [Bergman Aff, Exh. FJ.) Amon does not cite any legal authority that even if Mr. Sofer had apparent authority in those prior transactions to enter into contracts, that authority could be relied on over a decade later. 14 15 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 15] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 following condusory assertion: "It is clear that Sofer acted for and bound Amon in com1ection with numerous loan agreements to museums he entered into for antiquities owned by Amon, Sofer also committed to purchases at auctions he attended." (Pl.'s Memo, ln Opp, at 6 [internal citations omitted].) Amon makes no factual showing as to the process by which Mr. Sofor was authorized to make contracts for loans to museums or to bid at auctions. Nor does Amon make any shmvfog that Mr. Sofer's acts in connection with either the museum loans or the auctions were comparable in any respect to entry into contracts with third parties for purchases. These acts therefore fail to support Amon's claim of implied actual authority. 12 In sum, the court finds on this record that Amon fails to demonstrate that, or to raise a triable issue of fact as to whether, Mr. Sofer had apparent or implied actual authority to purchase the Kore on A.mon's behalf. 13 At most, the evidence supports a finding that Amon bestowed on Ivk Sofor authority to recommend artworks to Amon, but not to bind i\.rnon to the purchases. In so holding, the court notes the testimony of both Mr. Sofer and Ms. de Catie that there was no occasion on which Mr. Sofer recommended a purchase that Amon declined to approve. The court also notes that Amon would likely have approved his recommendation on this occasion as well, as indicated by Ms. de Carte's testimony that "Amon would have acquired the piece had we had an invoice and documents to back it up. We knew that the intention was there to buy it" (de Carte Dep. at 57:7-9.) The court, however, rejects Arnon's contention that this evidence demonstrates Arnon's intention to authorize Mr. Sofer to contract for the Kore on 12 lt is also noted that there is no evidence that the museum loans or bids were made in Mr. Sofor's rather than Amon':; name. 13 In view of this holding, the com1 does not reach defendants' claim that the doctrine of apparent authority may only be asserted by a third party who seeks to hold a principal liable for the acts of its agent, and not by the principal itself against the third party. (See Defs.' Reply Memo. at 2-3,) 15 16 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 16] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 Arnon's behalf: Relying on this evidence and the general precept that it is the court's role in interpreting a contract to ascertain the parties' intentions at the time of contracting, A.mon concludes: "'That Sofer had authority for Amon in this situation is consistent with the intentions of the parties," (PL's Memo. In Opp, at 7, quoting ,~fL/\§§_~LMgLLI,('...Y..I-~YJfl~, 111 AD3d 245, 256 [I st Dept 2013.J; PL 's Memo. In Opp. at 4-5, quoting ~IQ}illJ~rn~. . rn~_g_, _ _(\1riJr§.,,,J.11t:_,_y __~-~m:n Cg_n§tr, ..GQi;p_., 41 NY2d 397, 399] [1977],) Amon's argument ignores the overwhelming testimony of ~k Sofer and Ms. de Carte that only Amon had authority to enter into a contract fi.1r purchases of antiquities (even if Amon may have effectively acted as a rubber stamp for Mr. Sofor's recommendations). Significantly, neither Mr. Sofer nor Ms. de Carte ever testified that I\1r, Sofer was authorized, or that they even believed him to be authorized, to contract on 1\rnon's behalf in this situation involving the Kore. Amon's self-serving declaration in its brief that it was Amon;s intention to bestow authority on Mr. Sofer 's authority for· this one transaction cannot excuse Arn.on from demonstrating that, under the doctrines of apparent and implied actual authority, Amon manifested assent to Mr. Sofer's authority to enter into the contract for this transaction at th~ t!m~ ,!! was made. Finally, this court notes that evidence in the record suggests that defendants may have cancelled the contract due to the potential for a rnore desirable offer of $750,000 from another buyer during the time plaintiff was making arrangements to pay the $650,000 that Mr. Sofer had offered. (See <Jette Aff. In Opp. ~ 20 [stating that on January 20, 2013 Baron Thyssen 'vVas sho'Wn the Kore and agreed to recommend purchase for his daughter's trust for $750,000].) The court cannot ignore, however, that Mr, Sofer created a trust under \Vhich he \Vas required to obtain Amon 's approval of contracts for purchases in order to avail himself of the benefits (undiscussed on these motions) of the trust stmctme, and that he failed to do so before 16 17 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 17] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 defendants cancelled the contract for the Kore. In moving for summary judgment, defendants also contend that Amon did not ratify the alleged contract for the Kore. (Def;;;,' Memo. In Supp. at 4,) Amon does not expressly address ratification in its papers, instead resting on its claim that Mr. Sofer had the authority to act for it (0_~~ PL's Memo. In Opp. at 4-7.) In any event, Amon does not submit evidence on this motion that would be sufficient to raise a triable issue of fact as to whether Amon ratified the contract made by Mr. Sofor. It has long been held that "[o ]ne may ratify the acts of anotlH.:r purporting to be made on his behalf whether that other is an agent exceeding his authority or no agent at all." (8-_?msa,Ly Miller, 202 NY 72, 75-76 [1911].) Ratification may be made "by affirmative acts, and even by 1rr~-"286AD2d 118, 126-128 [1st Dept 1991].) 14 There is authority that ratification vvill be effected by the principal's prolonged failure to Co., 306 AD2d 82, 85 [1st Dept 2003] [holding that ''plaintiff implicitly ratified the settlement by making no formal objection for months after she \Vas told about it"]; 11.i(u;-.:og~ggrn~ ..~.m:p,.. .Y Cruz, 175 AD2d 747 fl st Dept 1991] [holding that '"silence <md acquiescence constituted a ratification" of a stipulation of settlement, where the pmty did not claim, until years afler the A principal may overtly ratify an agreement through payment or partial payment on the contract ~ Mu1itex by retaining the benefits of an unauthorized transaction with knowledge of material facts. (L~C~rn-1~1~.i:ill.JLHfil.l~mJ;-;mrnrnmjtcGrr",Jg_i;:_,_y_f.~.r.~~ i:\m,_Tit.Jn~,CQ,_gfJ.i,X,, 146 AD3d 473, 473 [isl Dept 2017].) Neither party alleges that Arn.on took any such overt steps to ratify the contract. 1 '' TJ.;;;J\,Jr1_~~,--v:_Mw:vmJ0;iiJ1ingJrWfa".Jnf.,, l 2 AD3d 169, 170 [ 1sl Dept 2004]) or 18 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 18] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 stipulation had been entered into, that its attorney and employee/agent did not have authority to sign the stipulation].) Here, however, only two weeks elapsed between Mr. Sofer's January 12 email and Ivk Aboutaam's January 25 email cancelling the sale< 15 Further, as held by the Co mt of Appeals, "ratification of an agent's acts requires knowledge of material facts concerning the allegedly binding transaction," (M.~P:t:X..QfN_,Y, __~10.l~ email does not outline any details of the alleged agreement but, rather, explicitly anticipates a future document that would contain "the logistics of the sale (formal short agreement, invoice with photos etc,)." (Bergman Aff, Exh. AA.) Knowledge of the material terms of the alleged agreement therefore cannot be imputed to Amon based on this email. J'vfore important, any claim of ratification based on rvis. de Carte's silence in response to the January 12 email would be plainly inconsistent with Ms. de Carte's repeated testimony (discussed ~JJPrn at 8-10), that Amon required compliance with a fom1al process in order to approve the contract Amon also cannot be found to have ratified the contract based on the filing of this lawsuit. The complaint vvas filed on February 4, 2013, but defendants had cancelled the sale ten days _earlier on January 25, 2013" (Bergman Aff, Exh. Z.) A third party may withdraw from an agreement before ratification takes place. CS.~.~ Restatement [Third] of Agency§ 4,05 ("A ratification of a transaction is not effective unless it precedes the occurrence of circumstances that would cause the ratification to have adverse and inequitable effects on thl'.~ rights of third is The court notes that f.1r. Aboutaam testified ihat, prior to seiiding the January 25 email, be had told Mr. Sofer that the sale oftbe Kore had been cancelled "[o]ver one of the phone calh with him when tbe money did not arrive to the account." (R Abcm.taam Dep. at i 3: 16-25.) As the record is unclear as to when these calls took place and exactly what was said, the court relies on the January 25 email for evidence of the cancellation. 18 19 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 19] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 parties" including "any manifestation of intention to withdraw from the transaction made by the third party"]; .i_i;L at Comment c ["[A] third party [can] withdraw from a transaction when the third party is not bound because the agent acted without actual or apparent authority, so long as the third party manifests an intention to withdraw prior to the principal's ratification"]; 12 Richard i\, Lord, Williston on Contracts§ 35:28 [4th ed 1990, rev 2017] ['"[I]t is generally held that withdrawal at any time prior to the ratification is effectual"],) In the alternative, plaintiff argues that "fi_]f Amon did not have a contract, Sofor did," and that Amon has rights as a third party beneficiary of Mr. Sofer' s contract. (PL' s Memo, In Opp. at 8,) Amon seeks leave to amend the complaint to assert its breach of contract and other claims on hehalfof"Arnon and/or Sofer." (Id. at 8~9; Proposed Am. Comp!. [Gette Aff, Exh. B_].) A party asserting rights as a third party beneficiary must first show that a valid and binding contract existed between other parties, in this case het\veen defendants and Mr. Sofer_ f.2000].) Before Amon's third party beneficiary claim can be considered, the court m.ust accordingly detem1i11e whether Amon should be granted leave to amend the complaint to plead that Mr, Sofer contracted for the Kore. It is well settled that the decision whether to permit amendment ofpleadings is committed to the discretion of the court (falt;_rp.yghi__(::_g_ntr, __('.Q_.__ _y__(:in_Qf;-{~yc.!~Qik, 60 NY2d 957, 959 [1983].) In general, leave to amend a pleading should be freely granted absent prejudice or surprise resulting fonn the delay. (CPLR 3025 [b]; IJi,Qm<l~ __Grimmjg~_CQntr,__ (_Q_, lg(;_, __\IJ::ib:_g[N~>YXmk, 74 NY2d !66, 170 [1989],) Leave to amend should, however, be denied if the amendment is plainly lacking in merit mt at 170; u~rrii;k__y __s~(;_QJ:lQ __~;[,l_thQ_l1_~~' 19 20 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 20] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 lJ4,, 64 NY2d 692, 693 [1984].) It is the movant's burden to "'sh(nv that the proffered amendment is not palpably insufficient or dearly devoid of merit" (See M~It\Jn§_J;-;:QtJLY A.s held above in c01mection with Amon' s breach of contract claim, Mr. Sofer' s and Ms. de Carte's deposition testimony and the docurnentary evidence dearly show that Mr. Sofor's role in the transaction was that of purchasing advisor; that he merely recommended that Amon purchase the Kore; and that Amon was the entity that \Vas required to contract for the purchase. The claim that Mr. Sofor contracted to buy the Kore is plainly inconsistent with, and refuted by, the deposition testimony and documentary evidence. Plaintiffs motion to amend the complaint will accordingly be denied as palpably without merit As plaintiff cannot show that a contract existed bet\.veen defendants and J\k Sofer, plaintiff's third party beneficiary claim must also fail In conclusion, the court holds that plaintiff fails to demonstrate any basis for its claim that it had an enforceable contract for the Kore. 16 Plaintiffs claims based on the alleged contract for the Kore are set forth in its first cause of action for breach of contract (CompL 1~ 30-35), its second cause of action for replevin (id. 1~[ 36-38), and its third cause of action against Mr, Aboutaam which, although not expressly so denominated, appears to seek damages for tortious interference 1.-Vith contract (id. ~ii 39-42). Plaintiff moves for summary judgment as to liability on the first and second causes of action, and for summary judgment dismissing defendants' first and second counterclaims. Defendants' first counterclaim seeks a declaration that plaintiff does not u• Jn view of th.is disposition, the court does not reach defendants' claim that ifa contract was made, Amon breached the contract by failure to make payment according to its terms. 20 21 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 21] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 have a contract "vith defendants for the purchase of the Kore. (Answer and Counterclaims ir 30 [Ansv,lerJ,) The second counterclaim alternatively seeks damages for breach of any contract that was made for such purchase, based on plaintiffs alleged failure, among other things, to make timely payment (Id. 'f 33.) Defendants move for summary j u.dgment dismissing the complaint in its entirety and for summary judgment on their first and second counterclaims. Based on this court's finding that an enforceable contract for the sale of the Kore was not made, plaintiffs motion for summary judgment on its first and second causes of action and for dismissal of defendants' first and second counterclaims will be denied. Defendants' motion for summary judgment will be granted to the extent that it seeks dismissal of the complaint with prejudice, and denied as moot to the extent that it seeks judgment on its first and second counterclaims. The court accordingly turns to the remaining branches of the parties' motions, which relate to the counterclaims, Defendants asserted ten counterclaims. The first and second, \vhich relate to the Kore, have been addressed above. The third through fifth coooterclaims, seeking damages for defamation, tortious interference with prospective economic relations, and fraudulent inducement, respectively (Answer irir 35-47) were dismissed by decision and order of this court, dated October 24, 2013. The Appellate Division affi.rmed the dismissal of the fomih and fifth counterclairns on an appeal as to those counterclaims. (t\m2nJ~J.ti__jJQ_MLYJ?g_i~r:wttlt~§, 125 AD3d 453 [1st Dept 2015].) The sixth counterclaim seeks damages resulting from the i11jtmction previously issued in this action. (Answer ~rir 48-50.) The seventh through tenth counterclaims seek damages for conversion (id, ~1T 51-57), unjust enrichment (id. ~4'[ 58-60), quantum mernit 21 22 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 22] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 (id. ~i~ 61-63), and breach of contract (id. ~4! 64-68), respectively, all arising out of a series of transactions, prior to the Kore transaction, involving other antiquities. ~1~~t~__C91m1~a:~J~im Defondants' sixth counterclaim alleges that "'[p]1aintiff was not entitled to the restraints and iajunction heretofore issued in this action" and that, "[b]y reason of the aforesaid restraints and injunction," Phoenix \vas damaged in the amount of$ 80,000,000. (Answer ~4! 48-50.) Defendants move for summary judgrnent as to liability on this counterclaim, while plaintiff moves for summary judgment dismissing the counterclaim. Defendants merely assert that the counterclaim "seeks damages for Arno.n's having improperly obtained stays \vhich prevented the sale of the Kore to ACL [Augustus Collection, Ltd,]," and is "ripe for at least partial determination on this motion." (Bergman Aff. In Supp. 4"[ 17; Defa.' Memo. In Supp. at 25.) Plaintiff merely asserts that the sixth counterclaim "is redundant to the relief provided in CPLR 6315." (Gette Aff. In Supp. at 2.) Neither party makes any legal arguments or submits any legal authority in support of the requested relief In particular, the parties fail to address a substantial body of law on the circumstances in which damages will be awarded where a pal1y prevails on a motion for a preliminary injunction but not on the merits. (~gm1@:~ l i LA,_YI!':_SJ9JL_c9I!2:":tE?:PK.if~tiWl ~-m~r~!J.nc.:,, 68 NY2d 397 [1986] witJ!MwggJj!,;_~_yJ~It~2WlWLJnc.,, 42 NY2d 475 [1977].) They also wholly fail to address the availability of damages resulting from the injunction under the circumstances of this case. These circumstances include that the issue of whether plaintiff was entitled to the injunction was never litigated. Rather, the parties stipulated to the grant of the injunction, although defendants purported to preserve their right to "recover of Plaintiff (and receive payment from Plaintiff andior the Undertaking) to the extent of the provable damages, 22 23 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 23] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 costs and reasonable counsel fees sustained and incurred by them to the extent permitted by lm'v·. , , ." (Stipulation, dated Mar. 5, 2013, ~ 3 [NYSCEF Doc No 43].) ln addition, although the court did not decide the issue because the motion for a preliminary injunction was resolved by stipulation, plaintiff appears to have had a strong claim that the Kore is unique and therefore presented a particularly compelling case that plaintiff would suffer irreparable harm absent an injunction. As defendant fails to discuss the impact of these circumstances on the availability of damages or otherwise to make any showing as to the merit of this counterclaim, the counterclaim \:ViU be dismissed. The dismissal win, hmvever, be without prejudice to defondants' right to seek damages on a showing of their legal availability and in a reasonable amount, pursuant to CPLR 6315. 17 The parties also dispute a series of transactions years before the Kore transaction. Defondants allege that in the period between 2001 and 2003, Amon "came into possession of various antiquities o-wned by Phoenix," described in "Schedule A" to its ans'>ver (Schedule A Items or Items). (Answer ~152, Exh. A.) The Schedule A Items are the subject of the four counterclaims. Mr. Sofor claims that the Schedule A Items were given to him as a form of "discount for my big purchases," (Sofer Dep. at 87: 16-1 7.) Defendants claim that Phoenix gave the Items to Amon on consignment (H. Aboutaam Dep. at 158:6-160:4, 163:16-164:12.) The seventh counterclaim for conversion pleads that "Phoenix consented to allow Plaintiff to retain possession of the Glass, Jewelry, Bowls and Seal up until such time as Phoenix l'I The ad damn.um clause for the COllilterclaim-$ 80,000,000 resulting from the inability to sell a Kore for which defendants had accepted a $650,000 offer-was grossly disproportionate to any damages that defendants could conceivably recover. 23 24 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 24] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 withdrew such consent," and that Phoenix \Vithdrew its consent in 2011. (Answer~~ 54-55.) The tenth counterclaim for breach of contract alleges that plaintiff "was given possession of [the Items] on 'on approval' terms pursmmt to which it was required to pay for said merchandise or return it to Phoenix upon Phoenix's demand therefor," and that plaintiff did not pay for or return the Items. (Id. iii! 65~67.) The eighth and ninth cmmterdaims allege unjust enrichment and quantum mernh based on the conversion allegations. In moving for summary judgment, plaintiff in effect contends that the parties' dispute as to the circumstances under which Mr. Sofer came into possession of the Schedule A Items is irrelevant, and that all of defendants' claims are barred by the statute oflimitations. (PL 's Ivfomo. In Supp. at l.)rn Plaintiff contends that the counterclaims accrued in 2003 and are therefore time-barn.~d (id. at 6-10), while defendants contend that the daim.s are timely because they did not accrue until 2011 when defendants served a written demand. (Defs.' rviemo. ln Opp. The parties do not dispute that the 2011 demand was made in the form of an email by Jeff Suckow 19 to Mr. Sofer, dated September 6, 2011, which vvas copied to Ali Aboutamn (Hicham Aboutaan1's brother) and stated in pertinent pf:!rt '"I [amJ writing regarding the items you have on (..'.Onsignment from us siuce 2002 aud 2003 .... Nine years is a descent [sic] period 18 Defendants assert their seventh through tenth counterclaims against plaintiff Amon. As plaintiff points out, "there is considerable unce1tainty as to ihe correct parties to the counterclaims. The Schedule A Items were delivered to Sofor who is tedmica1ly not a party to this action. Many of the items appeared not even to be mvned by Phoenix at the time they were given to Sofer." (PL 's Memo. In Supp. at 5.) Plaintiff does not, however, move for summary judgment on the ground that the suit names the wrong party. Rather, both pmiies brief the statute of limitations issue on the apparent assumption that the real party at interest V\ras named, and the court will decide the issue accordingly. In addition, as also noted by plaintm: it is unclear from the record which acts relevant to the delivery of the Schedule A Items to Sofor occurred in Ne\.v Yoik (PL's Memo, In Supp, at 7 n 2.) However, as both parties brief !he statute of limitations issues under Ne\.v York law, and neither party obj eds to its application, lhe court wiH decide the issues under New York law. 9 As H. Aboutaam testified, l'vir. Suckow is affiliated with Inan:na, "an ari service company" used by Phoenix. (H. Aboutaam Dep. at 168:18-24; 156:2-9.) i 24 25 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 25] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 for a consignment It is a good time to close this matter." This email also requested instructions for collection of the Items, (f-L Aboutaam Aff., if~ 6- 7 & Exh. C fSeptember 6, 2011 demand].) The parties dispute 'vvhether that demand was effective to comrnence the rurming of the statute of limitations for the four counterclaims. As the Appellate Division of this Department has recently held, in summarizing an extensive body oflaw on the statute oflimitations for conversion; "Under CPLR 214 (3), the statutory period of limitations for conversion and replevin claims is three years from the date of accrual. The date of accrual depends on whether the current possessor is a good faith purchaser or bad faith possessor. An action against a good faith purchaser accrues once the trne owner makes a demand and is refused (see S9A9.D.1.9.n __!S,__ QlJKK~!ltwim F91JD4, __y__1J!Q~U, 77 NY2d 311, 317-318 [1991], affa t 53 AD2d 143 [1st Dept 1990]). This is 'because a good-faith purchaser of stolen property commits no wrong, as a matter of substantive !aw, until he has first been advised of the plaintiff's claim to possession and given an opportunity to return the chatter (153 AD2d at 147). By contrast, an action against a bad faith possessor begins to nm immediately from the time of,x.Tongful possession, and does not require a demand and refusal (~g~ S1<11!;"QfJi~JX..Ym:k..Y5~Y~ntJ~ R~iJl!It~nU'.\m"i, 98 NY2d 249 [2002]; pa.,yJc,i~_QXLYfi;l~£!n~!l?-, 269 AD2d 351 [2d Dept 2000])." (~):YflJJ1J:J~r9WD., 135 AD3d 629, 631 [1st Dept 2016].) "A demand need not use the specific word 'demand' so long as it clearly conveys the exclusive claim of mvnership .... By the same reasoning, a refusal need not use the specific word 'refuse' so long as it clearly conveys an intent to interJi.~re with the demander's possession or use of his property." (f~lQ.J:J:.~lg, 279 AD2d 393, 394-395 fist Dept 2001], ly_ denied 96 NY2d 717.) "Naturally, if demand would be futile because the circumstances show that the defendant knows it has no right to the goods, demand is 25 26 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 26] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 not required." (~yy~g~hJ~,~g!gJ&nt.fJm4,Jn~,, 98 NY2d at 260; see fil_fiQ M_c;Qmrnh _ _y_J&~H~, 65 AD3d 895, 896 [1st Dept 2009].) It is further settled that where a demand is required, "the true ow11er, having discovered the location of its lost prope1ty, cannot unreasonably delay making demand upon the person in possession of that properiy!' (Lubell, 77 NY2d at 319, citing H~Jg_©..Y..QJi_rl4t:X),Jlµi_c;_k,_(gm_,, 188 Misc 198, 198-199 [1st Dept 1947]; accocr.4 M<:trtin_y_~Ifa~_g§, 235 AD2d 192, 198 [1st Dept 1997]o) Otherwise "there is a potential for a plaintiff to indefinitely extend the statute of limitations by simply deferring the making of the requisite demand." CM_q~t~.r..9..fY~_t_©t~ __\i SDJh~Q~\.:_§.JU.£_,, 34 AD3d 29, 36 flstDept 2006], JY g_f;pied 8 NY3d 809 [2007].) Applying this standard, the court holds that the statute of limitations for the conversion claim has passed. In reaching this result, the comt notes that in the affidavit submitted on this motion, Mr. Hicham Aboutaam described the Schedule A transaction as follow-s: "In or around 2002, Phoenix made a consignment of ihe Oinochoe to Amon, along \Vith several other antiquities. Because it \Vas pursuant to a consignment agreement, Ar.non took possession without paying anything pending a further sale to a. third party or its own purchase. Although it can often take years to seU an antiquity, by 2011 Phoenix folt that it was time to end the consignment inasmuch as no sale had been made by Amon." (FL Aboutaam Aff. iJ 6.) According to Mr. Aboutaam, Phoenix then mad~~ the September 6, 2011 demand for the Items. (!_g, 4[ 7.) Mr, Aboutaam's claim that the consignment persisted until the September 6, 2011 demand vvas made is, hovvever, plainly inconsistent with his deposition testimony and that ofllis brother, AU Aboutaam, who was also involved in the alleged consignment of the Schedule A Items to Mr. Sofer. 26 27 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 27] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 In their depositions, the Aboutaam brothers repeatedly testified that Mr. Sofi.~r had been a good payer on significant purchases of antiquities, but that at some point around 2003, the Ahoutaams broke off business relations with 1llr, Sofer because of his failure to _pay for or return the Schedule A Items. Hicham Aboutaam testified that Mr. Sofer "started very good" on the other transactions, but there \Vas then "the dispute with the .. , pieces that he did not pay for and .. , this is when \Ve ended the relationship, became almost hopeless, , , . i_I]f snot enough if a client buys and pays quickly. This is .. , good, but if some bills they do not pay or they try to convert objects, then \Ve don't want the \Vhok relationship." (lL Aboutaam Dep. at 156:14-24.) \Vhen asked whether Phoenix had ever requested return of the Items prior to the September 6, 2011 demand, he answered tmequivocally: "Many times, but there's no records that \Ve could find to satisfy, you know, lawyers and the legal system!' (kL at 176:5- 11.) He further testified: "How can people hold objects without title, without piece of paper confirming that? And the fact that ... since 2003 we stopped a good payer, at the time he paid good prices, we just stopped the \vhole relationship for ten or eleven years, it means we're upset about these objects. \Vhy would \Ve lose a client ,;i;,;ho pays, you saw the bills, $1 million, $400,000.00. It's not money, H's the principle, It's theft We stopped it because of that" (Id. at 181:2-12.) Similarly, Ali Aboutaam testified: "[W]e claimed them many times, and he gave one, and then ... it was very difficult to get these pieces out of him. And then in turn, l told him, 'I cannot do business with you this way; you know, you have to pay for these --- all the things, or give them back" (A. Aboutaam Dep, at 20:4-9 [Bergrnan Aff, Ex. P].) He further testified that he stopped doing business with Mr, Sofer in 2002 or 2003 due to his failure to return the objects. (Id._ at 8:10-11; 9:4-5; 80:15-23.) 27 28 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 28] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 In opposing plaintiff's summary judgment motion, defendants rely on the conclusory allegation in their counterclaim that Phoenix consented to plaintiff's retention of the Scht~dule A Items until 2011 when it withdrew its consent (Deis.' Memo. In Opp. at 18, citing Answer~~ 54~55.) GS_e;;~ Defendants do not dispute that the Aboutaams' deposition testimony was to the contrary. Defs.' Memo. In Opp. at 18~19.) To the extent that they rely on Hicham Aboutaam's contrary affidavit stating that "by 2011 Phoenix felt that it was time to end the consignment" (H. Aboutaam Aff. ~I 6), this reliance is unavailing. Self~serving affidavits submitted by a party that contradict the party's own deposition testimony and "can only be considered to have been tailored to avoid the consequences of[] earlier testimony ... are insufficient to raise a triable issue of fact to defeat [a] motion for summary judgment." CP.J-iinhW.Y.13.X.~?_n~_J,_e;;:l;_MQHJjQg\_, 268 AD2d 318, 320 [1st Dept 2000]; fj~~~l§.Q EgrigyJnJl:Jn£:"YJ;~~~fQr4J;'.AQ1P:i_e;;r~,Jg~-" 143 ADJd 491, 492 [1st Dept 2016],) Here, on any version of the undisputed facts testified to by the Aboutaams, the conversion cause of action must be found to have accrued in 2003, when the Aboutaams stated they stopped doing business with him as a result of his failure to pay for or return the Schedule A Items. If Mr. Sofer was a "bad faith possessor" by 2003, as the Ahoutaams' testimony indicates they-and through them, Phoenix-considered him to be, no demand was required, On the above authority (supr_@.at 25), the cause of action accrued at the time of the bad faith possession in 2003, Alternatively, as the Aboutaams testified, ML Sofer came into possession of the Schedule A Items legally. Assun1ing that a demand was therefore required, the Aboutaams also testified that they made many requests for return of the Hems by 2003. On the above authority (~_µp_rn at 28 29 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 29] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 25), the demand was not required to take any particular form. The cause of action therefore accrued by 2003, when the Abouta.ams requested that ML Sofor return the Hems, and he failed to do SO" Finally, even assuming that the Aboutaams' requests for return of the Hems did not rise to the level of a demand necessary to trigger the statute of limitations, they repeatedly testified that they kne\.v by 2003 that Mr. Sofer had no right to retain the Items. On the above authority (supra at 26), they had all the information they needed to make a demcmd by 2003 and could not unreasonably delay in making the demand. On any of these scenarios, the three year statute of limitations for the conversion counterclaim began to run in 2003 and could not be extended by the September 6, 2011 demand. The interposition of the counterclaims in this action in 2013 was untimely. The conversion claim will accordingly be dismissed, ~rn!l~lt2f(;2ntD:wr The court also finds that defendants' tenth counterclaim for breach of contract is untimely, This counterclaim pleads that plaintiff was givt.~n the Schedule A Items "on "on approval' terms," requiring it to pay for the Items or return them "upon Phoenix's demand!' (Answer ,-rir 65,) In opposing plaintiffs summary judgment motion, defendants argue that the statute of limitations for this breach of contract counterclaim, like that for the conversion counterclaim, runs from plaintiff's refusal to return the Items in response to the September 6, 2011 demand, (Defs, M(:mo. In Opp. at 19.) CPLR 213 (2) provides for a six year statute of !imitations for '"an action upon a contractual obligation or liability, express or implied!' UCC § 2-725 (1) provides that ru1 action for breach of contract for the sale of goods "must be commenced \Vithin four years after the 29 30 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 30] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 cause of action has accrued." \Vhether the CPLR or the UCC statute of limitations applies------an issue this court need not decide on this motion-the action is time barred. '"In New· York, a breach of contract cause of action accrues at the time of the breach,' even if no damage occurs until later." (\;_h~lf:l.~?J~i~!It1~J~_,__y_J:h1fj§_~n1J5:iY~J~fl:!J~J):g~!, 106 AD3d 410, 412 [I st Dept 2013 ], quoting ELY::Crn!~~h_@k__~2:..Y.~§fil<;__gf.M211!t~f!:), 81 NY2d 3 99, 402 [1993l) \Vhere a demand is a "substantive demand"-that is, "an essential element of the plaintiff's cause of action"-the breach of contract does not occur until the demand is made and refused. (~~~mH.n~11t?cLC;f!~~--~2:..Y.SJrn.md19h1.J11~,__ (;9_,_,_Lt4~, 77 F3d 16, 21 f2d Cir 1996] [applying New York la\v].) In the case of such a demand, the plaintiff cannot be permitted to indefinitely extend th(: running of the statute of !imitations. Rather, as in the conversion context, the plaintiff may not unreasonably delay in the makfog of the demand. (Id.; see also L'.L?c!L.b.~~nx ..Gr.~~npQfaLMJg,_ _fgg_g_in.~LJn~.:' 2015 \.VL 915444, v,s,_ ~_@_!14 * 3A [Sup Ct, NY County Mar. 3, 2015] [this court's prior decision discussing substantive and procedmal demands], @.ffg 147 AD3d 79 [1st Dept 2016].) For the reasons stated in cormection with the conversion counterclaim, the cause of action accrued in 2003 and the statute of limitations was not extended by defondants' September 6, 2011 demand, {l~m_§!__[QDJrns:tCl~hrn~ The statute of limitations has similarly run on defendants' eighth and ninth counterclaims. Defendants fail to directly address the timeliness of their ~just enrichment and quantum memit claims, choosing instead to rely on their argument that the limitations period did not begin until "the date of the demand for the return of the objects [on] September 6, 2011" and that therefixe "the shortest statute of limitations urged by Amon, three years, has been folly com.plied with." (Defso' Memo. In Opp. at 19.) These counterclaims are based on the same facts 30 31 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 31] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 as the conversion and/or breach of contract counterclaims and are therefore governed by the same statute of limitations. (See e.g. Ym:hrn_s:j¥£U~Ltill:i1fL!ii!nkJ:-:Ll\~, 140 AD3d 668, 669 [1st Dept 2016]; M1,1.J:fl_NX_,_J,J,(:__ y_Hgg}g;r., 106 AD3d 583, 585 [1st Dept 2013].) As the court has held that the counterclaims for conversion and breach of contract are time-barred because they accrued in 2003, not 2011, defondants' counterclaims for unjust enrichment and quantum meruit are also time-barred. It is accordingly hereby ORDERED that the motion by defondants \Villiam Beierwaltes, Lynda Beienvaltes, Phoenix A_ncient Art S.A, and Hicham Aboutaarn for summary judgment is granted to the following extent: The complaint is dismissed in its entirely with prejudice; and defendants' first and second counterclaims are dismissed as rnoot; and it is further ORDERED that the cross-motion by plaintiff Amon Ltd (!OM) to amend the complaint is denied with prejudice; and it is further ORDER£D that the motion by plaintiff Amon Ltd (IOM) for summary judgment is granted to the follovdng extent: Defendants' sixth counterclaim is dismissed without prejudice, pursuant to the terms of this decision; and defendants' seventh through tenth counterclaims are dismissed with prejudice; and it is further ORDERED that the preliminary injunction shall be deemed vacated five days afler service of a copy ofthis order "vit11 notice of entry, such service to be made by personal delivery or overnight mail; and it is further ORDERED that the unde1iaking shaH be released unless defendants move by order to show cause, pursuant to CPLR 6315, within ten days after service of a copy of this order with notice of entry, for damages allegedly resulting from the preliminary injunction. Nothing herein 31 32 of 33 [*FILED: NEW YORK COUNTY CLERK 08/01/2017 10:39 AM 32] NYSCEF DOC. NO. 279 INDEX NO. 650371/2013 RECEIVED NYSCEF: 08/01/2017 shall be coustrued as suggesting that such damages have been incurred or are legally available. This constitutes the decision and order of the court, Dated: New York, New York August 1, 2017 32 33 of 33

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