AVA Acupuncture P.C. v Atlasman

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AVA Acupuncture P.C. v Atlasman 2006 NY Slip Op 30750(U) March 31, 2006 Supreme Court, New York County Docket Number: 103218/05 Judge: Karen S. Smith 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. [* 1] SUPREME COURT OF THE STATE OF NEW YORK I 90UNTYj OF NEW YORK: IAS PART 44 4 . ------~-----------------------------~---- x AVA ACli.JPUNCTURE P.C., CROSSBAY ACUPUNCTURE P.C.t LEXINGTON ACUPUNCTURE P.C., MIDBOROUGH ACUPUNCTURE P.C., FIRST HELP ACUPUNCTURE P.C. NORTH ACUPUNCTURE P.C., DOWNTOWN ACUP CTURE P.C., VAACUTHERAPY ACUPUNCTURE P .C. and VALENTINA ANIKEYEVA, Index No. 103218/05 Plaintiffs, -againstOLEG A MAIER, NIMBER VID B LASMAN, YULIY GOLDMAN, IRWIN ZELLERERALD NIMBERG, ANN NIMBERG, RICHARD , STEPHANIE NIMBERG, PAUL WEINER, DAR, VINCENT PUTIGNANO, BRIAN G. REIDY, FI l ED AN, BERISH BRAUNER, SAMUEL SCHWARTZ, GERALD SCHULTZ, MELVYN DOBRICHOVSKY, GJIBG- ORY RO BER SC WARTZ, SAMUEL KESTENBAUM, a.k.a. SAMU- APR 11 EL KAST NBAUM, MARVIN BRAUN, RUAN SCHER, MAX SC ER, JENO GUTTMAN, GEORGE FERNANI>ffika~~ew YORK MICHAE TRIMBA, ELIZABETH MASALSKA, DMIT~'' f OiafRJ(IS OFfr NIKONO , ALEX NEGINSKY, DAVID KATZ, OLEG OS~·, OVSKY, CHAEL AIZIN, SAMUEL BADALIAN, TIME MEDIC BILLING & COLLECTION INC., CIRCLE INTERNATION L GROUP INC., BLUE WAVE MANAGEMENT INC, GE ERALCREDIT CORPORATION, GENERAL CREDIT F BROOKLYN INC., GCBT LLC, GCC LLC, GCBT SB VICES, UCCI SERVICES, CASH PAYROLL EXPRES LLC, NEW YORK PAYROLL FACTORS INC., ACE VE*TURE INC., CARLY HOLDINGS INC., GENERAL ARM<pRED CORPORATION, G.S. CAPITAL CORP., GCC) BlfSH TERMINAL INC, MERSA CORP., MERYKA INC, DDI JACQUISITION SUB INC., CCC ACQUISITION CORP., HE WHOLESALE CONNECTION LLC, SUPER QUICK L C, RAPID PAY LLC, BARGAIN ISLAND LICENSED HECK 1 CASHIER, DEPENDABLE CHECK CASHIN INC, COMMUNITY CAPITAL BANK, REPUBLIC FIRS BANCORP, INC. d/b/a REPUBLIC FIRST BANK, INDEPE DENCE COMMUNITY BANK CORP d/b/a SI BANK & UST, STATEN ISLAND BANCORP INC. d/b/a STATEN SLAND SAVINOS BANK, HSBC NORTH AMER1 I ' I I ! [* 2] ICA HOI1DINGS INC. d/b/a HSBC BANK, J.P. MORGAN I CHASE & CO., J.P. MORGAN CHASE, AVA LLC, MT MEtjICAL P.C.,ADVANTA MEDICAL SUPPLIES INC, DAVID TZ & ASSOCIATES LLP, LAW OFFICES OF MIC L AIZIN P.C., and JOHN DOES 1 THROUGH 24 Defendants. ----------- ----------------------------------------------------------------- ){ KAREN • SMITH, J.S.C.: M tion Sequences 001, 002, 004, and 005 are consolidated for disposition in this order. In Motion S quence 001 : 1) defendant Community Capital Bank ("CCB") moves to dismiss the complain for failure to state a cause of action and for failure to plead fraud with particularity, and t Independence Community Bank Corp. ("ICB"), sued individually and as successor in interest t Staten Island Bank & Trust, ("SIBT") cross moves for the same relief. In Motion Sequence 002: 1) defendants Michael Aizin and Law Office of Michael Aizin, P.C. ("Aizin ") move to dismiss the complaint in its entirety as against them, and 2) defendant Gerald ross-moves for summary judgment dismissing the complaint as against him. In Motion Sequence 04: plaintiffs seek additional time to serve certain defendants who have not been served. In Motion Sequence 005: 1) defendants JPMorgan Chase Bank, N.A. & JP Morgan Chase & Co. (collectiv y "Chase defendants") move to dismiss the second, nineteenth, and twenty-first causes of action against them, and 2) plaintiffs cross move to amend the summons and complaint to add new partie and set forth additional allegations. . I ~ ration Sequence 001, the motion and cross-motion are denied in part and granted in part as more jly set forth below. In Motion Sequence 002, the motion is denied in part and granted in part and er ss-motion is denied as moot. In Motion Sequence 004, the motion is granted. In Motion Sequence 105, the motion is granted in its entirety, and the cross-motion is granted in its entirety. The court ua sponte dismisses the first through fifth causes of action as against all defendants. ntiffs, alleged providers of acupuncture services to automobile accident victims, seek damages der 18 USC§ 1961, et seq., the Racketeer Influenced and Corrupt Organizations statute (RICO), as well as under theories of New York common law, based upon an alleged scheme by 2 [* 3] which defendants converted more than $1,000,000 in checks that were payable to plaintiffs from no. · s.-. l t msurance earners. iau . I ·. The Complaint j rye complaint alleges that plaintiffs are victims of five "enterprises" 1 that stole checks payable t plaintiffs. The complaint alleges that the five "enterprises" generally followed the same basic sch me. Plaintiffs contracted with various medical billing and collection companies to recover payment for treatment from no-fault insurance providers. According to the complaint, the principal ofmedical billing and collection companies diverted checks from no-fault carriers payable to plainti s through the use of the mails and then delivered them to intermediary brokers who paid a discoun ed cash price for the checks. The complaint further alleges that the intermediary brokers then alle edly delivered the checks to numerous commercial check cashing businesses, which allegedly ook the checks with knowledge that the intermediaries lacked authority to cash them and deposited the checks in what plaintiffs characterize as "high-jacked banks" - banks that allegedly paid the checks, with knowledge of the lack of authority. The complaint alleges, upon information I and belie~ that in each of the banks, a bank employee to,ok cash bribes to process the checks. F fur of the five "enterprises" complained of consist of, in part, medical billing companies allegedly ,ontrolled by Oleg Atlasman. Defendants Time Medical Billing & Collection, Inc. (Time Medical), and its successor, Circle International Group (CIG), are identified in the complaint as "Atlasm Collection Corporations." ("Atlasman"), who, according to the complaint, contract with medicals rvice providers to take the primary documentation generated from each patient visit, generate a bill, and send it to the no-fault carrier. Allegedly, Atlasman also contracts to follow up ent from the no-fault carriers, using the services of law firms where necessary. The the insurers are generally made out to the providers. The complaint further alleges that Atlasman , sed the mails to steal checks payable to plaintiff providers. Additionally, two law firms, defendant David Katz & Associates and the Law Offices ofMichael Aizin, P. C., are alleged to have worked wir Atlasman in each of his enterprises to facilitate the theft of the checks. 1 Li~bility under RICO is premised upon a party's participation in an "enterprise", defined as a group f individuals who engage in a pattern of racketeering activity that includes violations of federal ,enal law. (See infra at p. 6-7.) 3 [* 4] I i The first Atlasman "enterprise" alleged in the complaint is the "GCC Enterprise", which allegedly fnvolves General Ciedit Corporation, a public corporation that allegedly has bOOn operating under C~pter 11 ofthe Bankruptcy Code since 2002, and seven other defendant commercial check cashing tinesses2• The complaint then identifies the "GCC Money Laundering Companies," i:f r which comprise twelve corporate defendants3• These companies allegedly served as conduits for the illegal dering of the percentage cut that the commercial check-cashers allegedly took from each check. 1 cashers complaint charges that all of the corporate entities named either as commercial check- J as GCC companies, are "alter egos of, and are owned, controlled, operated or manipulj~d, in various capacities, by" I 9 of the named individual defendants, identified as "the GCC P · cipals." 4 Atlasman is not named as a GCC principal. T' e complaint alleges that the "GCC Intermediaries," defendants Ruan Scher and Max Scher, p hased the stolen checks for cash on a discounted basis, with knowledge that the payee had not autho · ed payment, then passed the stolen checks to the commercial check cashers. The final link alleg din the "GCC Enterprise" are three defendant banks, movant CCB, HSBC North America Holdings, Inc.("HSBC"), and ICB, which allegedly cashed the checks for the commercial check cashers, owing that the endorsements on the checks were forged. second Atlasman enterprise identified in the complaint is the "Atlasman/Bargain Island Enterprise " Bargain Island Licensed Check Cashier is alleged to be a company licensed to do Pennsylvania, that cashed stolen checks delivered to it by intermediaries, and then e stolen checks to defendant Republic First Bancorp, ("Republic") which processed the 2 e other check cashing companies are identified in the complaint as defendants GCBT Services, CCI services, Cash Payroll Express LLC, The Wholesale Connection LLC, Super Quick LL~, Rapid.Pay LLC, andPayroll Factors Inc. 3 nJe Complaint identifies the GCC Money Laundering Companies as Carly Holdings Inc., Gene{~ Armored Corporation, General Credit of Brooklyn, Inc., GCBT LLC, GCCI LLC, G.S. Capij Corp., Ace Venture Inc., GCC Bush Terminal Inc., Mersa Corp., and Meryka Inc. 4 'Jlhe GCC principals are identified as Irwin Zellermaier, Gerald Nimberg, Ann Nimberg, Ipchard Nimberg, Stephanie Nimberg, Paul Weiner, pavid Bader, VincentPutignano, Brian G. Rpidy, Gerald Schultz, Melvin Dobrichovsky, Gregory Ronan, Berish Brauner, Samuel Schwartz, er Schwartz, Samuel Kestenbaum a.k.a Samuel Kastenbaoum, Ruan Scher, Max Scher, and arvin Braun. 4 [* 5] I checks wilh knowledge of the lack of authority. The complaint alleges upon information and belief thilt unideh~fied employees of Republic took cash bribes fo participate in the scheme. le third Atlasman "enterprise" identified in the complaint is the "Atlasman-J.P. Morgan Enterprise", which allegedly involves the use by Atlasman of the bank account of T Medical, P.C. ("MT Medical"), owned by defendant Michael Trimba, M.D., the bank account or defendant Advanta Medical Devices, Inc. ("Advanta"), a durable medical device company, and the bank account of an entity known as AVA LLC. Atlasman allegedly controls both MT Me~i al, Advanta, and AVA LLC through nominee owners, and used their accounts to deposit checks sto en from plaintiffs. Atlasman allegedly controls their accounts with the Chase defendants, on information and belief, the complaint alleges that an unidentified employee took cash bribes. fourth Atlasman "enterprise" identified in the complaint is the "Atlasman/Dependable · g Enterprise." Defendant Dependable Check Cashing is a New York Corporation that allegedly ashed stolen checks delivered to it by intermediaries, and then delivered the stolen checks to defend t SIBT, which allegedly processed the checks with knowledge of the lack of authority. I . The comp aint alleges upon information and belief that unidentified employees of SIBT took cash ·cipate in the scheme. fifth "enterprise" alleged in the complaint is the "Blue Wave Management/ General Credit Co oration Enterprise." Atlasman is not alleged to have a part in this enterprise. Blue Wave Managem .nt, Inc. (Blue Wave), is a no-fault billing and collection company allegedly owned and operated br defendants Yuliy Goldman and Alex Neginsky, and which allegedly contracted with plaintiffs T Anikeyeva and Crossbay Acupuncture, Inc., to perform medical billing and alentina collection rervices. Blue Wave allegedly stole checks payable to plaintiffs and laundered them through the GCC Intermediary brokers, defendants Berish Brauner, Max Scher, and Ruan Scher, who allegedly lelivered the checks to the GCC commercial check cashers, which deposited them with CCB. Th complaint sets forth twenty two separate causes of action. The first five causes of action seek recovfry under 18 USC § 1964 (c) for an alleged course of racketeering perpetrated by each enterprise isted above. Each cause of action is pleaded against the individual and corporate 5 [* 6] I members of the purported enterprise. The sixth through tenth and eleventh through fifteenth causes of action ssert claims in comn.lon law fraud and common law conversion, respectively,~ against the members f the purported enterprises, with separate causes of action being asserted against each purported enterprise5• The sixteenth through eighteenth causes of action sound in common law negligenc against the banks and the John Doe defendants, who represent bank employees who allegedly accepted plaintiffs' checks for payment6• The nineteenth cause of action, pleaded against all defenJmts, is based upon unjust enriclunent. The twentieth cause of action, pleaded against David Ka and David Katz & Associates LLP only, sounds in common law breach offiduciary duty. first cause of action, asserted against defendants Oleg Atlasman, Michael Aizin, Time Medical illing and Collection Inc., and Circle International Group Inc., seeks a declaratory judgment oiding a stipulation of settlement between those defendants and the plaintiffs which was executed ·. another, prior lawsuit. The twenty second cause of action (mislabeled the twenty first claim in Je complaint) seeks injunctive relief against all defendants, enjoining and restraining them from recel.mg, cashing or otherwise negotiating any checks or made payable to the plaintiffs or moneys c llected on behalf of plaintiffs by the defendant attorneys. court will address the RICO claims first. Then, the court will consider the motions, to ey have not been rendered moot. Plaintiffs RICO Claims Pl · tiffs base their RICO claims on 18 USC§§ 1961, 1962 (c) & (d), and 1964. 18 USC Section 1 62 (c) states:"[i]t shall be unlawful for any person employed by or associated with any enterprise I ngaged in, or the activities of which affect, interstate or foreign commerce, to conduct or particip te, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketee · g activity or collection of unlawful debt." Section 1962 (d) provides: " [i]t shall be r any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of unlawful 5D~fendants AVA LLC, Samuel Badalian, the Chase defendants and John Does 13 through 1S. are named in the second cause of action as members of the alleged RICO enterprise. However, ey are not included in any of the conversion or fraud causes of action. 6 N cause of action for negligence is asserted against the Chase defendants or John Does 13 throug 15. 1 6 [* 7] S ction 1961 ( 1) (B) defines "racketeering activity," as relevant here, as being a violation of any one o many enumerated federal penal provisions of Title 18, USC, commonly referred to as "predicat acts." Plaintiffs rely, for the requisite predicate acts, on Mail Fraud ( 18 USCA § 1341 ), which pr scribes use of the mails in furtherance of any scheme or artifice to defraud. S ction 1961 (5) provides an open-ended definition of"pattem of racketeering activity" as follows: "rpattem of racketeering activity' requires at least two acts of racketeering activity, one of which oc ed after the effective date of this chapter and the last of which occurred within ten years (excludin any period of imprisonment) after the commission of a prior act of racketeering activity." The Supf me Court requires that, for racketeering acts to constitute "a pattern of racketeering activity," (HJ. Inc. e acts must be "related" and "amount to or pose a threat of continued criminal activity" iV Northwestern Bell Telephone Co., 492 US 229, 239 [1989]). The predicate acts must be "interr lated by distinguishing characteristics and are not isolated events" (Id at 239 [1989]). There, the Court stated: "it is ... the relationship that [the predicate acts] ... bear to each other or to some exte al organizing principle that renders them [a pattern];" (United States v Eufrasio, 935 F2nd 553, 565 [3rc1Cir1991]). Se tion 1961 (4) provides a similarly open-ended definition of enterprise: "'enterprise' includes y individual, partnership, corporation, association, or other legal entity, and any union or group f individuals associated in fact although not a legal entity." The Supreme Court has described RICO association-in-fact enterprise as "a group of persons associated together for a common urpose of engaging in a course of conduct," which requires proof "by evidence of an ongoing o ganization, formal or informal, and by evidence that the various associates function as a unit" (United States v Turkette, 452 US 576, 583 [1981]; see also First Capital Asset Mgt, Inc. Satinwood, Inc., 385 F3d 159, 172 [2nd Cir 2004]). A RICO enterprise must exist as a distinct en ity separate from the pattern of racketeering (see Cedric Kushner Promotions, Ltd v Don King, 533 US 158, 159 [2001]; Turkette, 452 US at 585). For an association of individuals to constitute a RICO enterprise, the individuals "must share a common purpose to engage in a particular fraudulent ourse of conduct and work together to achieve such purposes." (First Nationwide Bank v Gelt Fun ing Corp., 820 F Supp. 89, 98 [SD NY 1993] [internal quotation marks omitted], affd, 7 [* 8] i 27 F3d 7 '3 [2d Cir1994]; Calcasieu Marine National Bankv Grant, 943 F2d 1453 [5th Cir 1991]). S ction 1964 (c) provides "Any person injured in his business or property by teason of a violation f section 1962 of this chapter . . . may sue therefor in any appropriate United States district co • and shall.recover threefold the damages he sustains and the cost of the suit, including 1 a reasonalhle attorney's fee" cdurts generally have held that RICO claims should be pleaded with particularity. "The pleading ~ust be sufficiently particular to s~e the three goals ofRule 9(b), which are {l) to provide t with fair notice of the claims against him; (2) to protect a defendant from harm to his or goodwill by unfounded allegations of fraud; and (3) to reduce the number of strike suits [citations mitted]" (Dietrich v Bauer, 76 F Supp2d 312, 328 [SD NY 1989]). The First Department holds that "RICO claims must be pleaded with particularity and allege a pattern of racketeering activity. ecause [plaintiff] failed to specify the time, place, manner or content of any false [mailings he alleged were made by [defendant], he has not met the particularity requirement (Robbins 7lWCorpvAshkenazy,228AD2d351,358[IstDept1996]). Because 11themereassertion claim ... has an almost inevitable stigmatizing effect on those named as defendants, ... courts sh uld strive to flush out frivolous RICO allegations at an early stage of the litigation." (Katzman . Victoria's Secret Catalogue, 167 FRD. 659, 655 [SD NY 1996], quoting Figueroa Ruiz v Alegria, 896 F2d 645, 650 [1st Cir1990]). e court dismisses the RICO causes of action on the ground that the elements of RICO are not plead ·d with sufficient particularity. Specifically, the complaint fails to allege with any specifici that the members of the alleged enterprises "associated together for a common purpose of engagin in a course of conduct" such that the enterprise could be considered separate and distinct from the attem of racketeering activity. There is no allegation of any meeting or conversation among an of the alleged constituent entities of these alleged criminal enterprises. There is no allegation as to how each alleged enterprise was managed, much less as to how each defendant participate in the conduct of the particular enterprise's affairs. The complaint contains no allegation regarding the hierarchical organizational, or consensual decision-making structure of any alleged as ociation-in-fact enterprise that could support a finding that its "members functioned as 1 a unit." (Turkette, 452 US at 583.) It appears from the face of the complaint that each alleged 8 [* 9] enterpris , rather than being a single association, is a group of discrete entities. For instance, in the allf!ged" CC Enterprise", it appears that the Atlasman and the entities he controlled, Time Medical c., and Circle International. Group, simply sold the checks they stole to the GCC entities Billing, o further involvement with the GCC entities. The GCC entities, in turn, deposited the th the defendant banks, but had no further involvement with the banks. The only link checks 1 e entities, apart from plaintiffs conclusory allegations the individual parties were all members fa conspiracy, is their place in the chain of custody of the stolen checks. It appears from the compl ·nt that each entity gained possession of the checks through an arms length, albeit illegal, transactio , and not through common membership in a criminal enterprise. The other alleged enterprise are similarly deficient. The complaint thus affords no basis to support the conclusion that the suppo ed constituent entities of the five alleged Enterprises were "associated together for a ,urpose of engaging in a course of conduct." (United States v Turkette, 452 US 576, 583 [1981]). MI reover, even if the complaint sufficiently sets forth the existence of an enterprise for the purposes f RICO, it still fails to set forth any factual basis on which to posit RICO liability against any of the defendant banks. "[C]orporations may not be held vicariously liable for the actions of their empl yees in violation of the RICO statute where the plaintiff has not alleged any facts which portray th company as an active perpetrator of the fraud or a central figure in the criminal scheme [citations mitted]" (Renner v Chase Manhattan Bank, 1999 WL 47239 *9 [SD NY]; Oatar National Navigatio & Transportation Co., Ltd v. Citibank, N.A., 1992 WL 276565 *7]). Even if an employee ere found to have taken bribes to clear stolen checks, and the individual was found to have parti ipated in a RICO enterprise, that would not make the bank a participant. The complaint does not c ntain any specific allegations that the defendant Banks had any knowledge that their employees were accepting bribes in exchange for depositing the stolen checks. e extent that the first through fifth causes of action are based upon a RICO conspiracy, so be dismissed. "[A] RICO conspiracy claim cannot stand where, as here, the elements of the subs antive RICO provisions are not met" (Hall v Tressie, 381FSupp2d101, 111 [ND NY 2005]; see !so First Capital Asset Management, 385 F2d at 174; Nasik Breeding & Research Farm Ltd v. Merrk & Co., 165 F Supp.2d 514 [SD NY 2001]. "If the prior claims do not state a cause of I I I I I I I I i 9 [* 10] action forjsubstantive violations of RICO, then a RICO conspiracy claim necessarily does not set forth a corpiracy to commit such violations" [citation omitted] @. Since plaintiffs hav~ failed to properly P,lead substantive RICO causes of action, their claims for RICO conspiracy must likewise be dismis Jed. Motion Sequence 001 D fondant CCB moves to dismiss the complaint for failure to state a cause of action (CPL R 3211 [ [7]), and for failure to plead fraud with particularity (CPLR 3016 [b]). Defendant ICB motion individually and on behalf of defendant SIBT. The banks also move to dismiss all comm n law causes of action in the complaint, fraud, conversion, negligence and unjust enrichme t, each on the ground that the required elements are not adequately pleaded. As the court has already addressed the RICO claims, it will consider each ofthe common law claims in wr respect to common law fraud, the banks first argue that nowhere in the complaint is it alleged tijt plaintiffs had any interaction with CCB, or that its representatives made any material misrepres,ntation to plaintiffs. They argue further that the common law fraud causes of action contained i the sixth and tenth causes of action are not pleaded with sufficient particularity as individually. On a motion under CPLR § 3211 (a) (7), the court's role is to detennine whether plaintiffs' pleadings et forth cause of action. (511West232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144, 151-1 2 [2002]). If any cause of action can be discerned from the pleading's four comers, the motion m ,st be dismissed. (Id) The complaint is liberally construed and any factual allegations contained erein are accepted as true. (Id.) To set forth a claim sounding in common law fraud a plaintiffm st allege (I) the existence ofa misrepresentation or a material omission offact which was false and own to be false by defendant, (2) that the representation was made for the purpose of inducing e plaintiff to rely upon it, (3) that plaintiffjustifiably relied on the misrepresentation or material omission, and (4) that plaintiff was injured as a result. (Lama Holding Company v. Smith I Barney, 88 NY2d 413, 421 [1988][internal citations omitted].) "Where there are multiple defendants involved, the plaintiff must connect the allegations of fraud to each defendant ... The complaint annot generally refer to fraudulent acts by all or some of the defendants because each IO [* 11] defendan, is entitled to be informed of facts surrounding the allegations so that they may respond."rolony at Holbrook, Inc. v Strata G. C., Inc. 928 F Supp 1224, 1231 [ED NY 1996].) 1e common law fraud claims are dismissed against the banks, as there is no allegation that the banks ade, or assisted other defendants in making material misrepresentations relied upon by the plainf s. At most, the complaint alleges that the banks permitted other defendants to deposit fraudulen y obtained checks. This action alone is not sufficient to maintain a cause of action for fraud aga · t the banks. The cases cited by plaintiffs (Divittorio v. Equidyne Extractive Industries, Inc. 822 :.r 1242 [2nc1 Cir 1987]; Board ofManagers of411 East 53"' Street Condominium v. Dylan Carpet, Inf., 182 AD2d 551 [1st Dept 1992] ;Tompkins PLC v. Bangor Punta Consolidated Corp 194 AD2d 49 [1st Dept 1993]) are readily distinguishable from the present circumstances. In those cases, wh re the complaints did not allege specific fraudulent acts against individual defendants, the that the defendants' direct involvement in the fraudulent acts themselves could be inferred m the facts alleged. No such facts are present here. Accordingly, the fraud claims must be dismis ed against the defendant banks. TI banks challenge the sufficiency of the allegations of conversion in the eleventh and fifteenth c uses of action on the ground that under NY UCC § 3-419 ( 1) (c), a depositary bank can only be he d liable for conversion, when it pays a check over a forged indorsement, where the forged instrumen had been in the actual or constructive possession of the payee. Here, the banks argue, plaintiffs ever possessed the checks, so they cannot maintain an action for conversion of those checks. laintiffs argue that they obtained constructive possession of checks when the no-fault insurance ompanies delivered the checks to the defendarit medical billing companies. Co version is the unauthorized assumption of ownership of and exercise of right over property belonging to another, to the exclusion of the owner's rights therein. (Vigilant Insurance Company ffAmerica v. Housing Authority ofthe City ofEl Paso, 87 NY2d 36, 45 [1995]). Section 3-419 oftle New York Uniform Commercial Code provides as follows:" (1) an instrument is converted when ... (c) it is paid on a forged indorsement. (2) In an action against a drawee under subsection (1) the measure of the drawees liability is e face amount of the instrument. .. (3) Subject to the provisions ofthis Act concerning restrictive indorsements a representative, ina uding a depository or collecting bank, who has in good faith and in accordance with the 11 [* 12] I rekonable commercial standards applicable to the business of such representative dealt with an Iinstrument or its proc~~ds on behalf of one who was not the true owner is not. ljable in co~version or otherwise to the true owner beyond the amount of any proceeds remaining in hi~ hands. On a causll of action for conversion of a fraudulently endorsed check against the drawee, the party to whom e check was made payable must establish possession, either actually or constructively, of the chefk. (State ofNew York v Barclays Bank ofNew York; N.A. (76 NY2d 533 [1990).) The payee of4e check will be deemed to have constructive possession ofthe check if the check has been delivered ro the payee'.s agent. (Lawyers' Fund/or Client Protection of the State ofNew Yorkv. Gateway 'fate Bank, 239 AD2d 826, 827[3n1Dept1997].) Pl ·ntiffs have sufficiently pleaded a cause of action for conversion against the defendant e complaint alleges that the banks accepted checks made payable to the plaintiffs for banks. deposit in o the accounts of various defendants, while knowing that the plaintiffs had not given the defendant authority to negotiate those checks. While the complaint does not allege that plaintiffs ever had aetual possession ofthose checks, it does allege the plaintiffs contracted with the defendant medical bi ling companies and law firms to recovery payment for medical services. Thus, when the defendant medical billing companies and law firms received checks from the no-fault insurance companie , they were acting as plaintiffs' agents, and plaintiffs thus had constructive possession of the check . While issues of fact may exist as to whether the banks accepted the checks knowing endorsem nts had been forged, the complain~ sets forth sufficient allegations to establish a claim for conversio against the defendant banks. Th banks challenge the sufficiency of the sixteenth cause of action, which seeks to hold the banks liab e for negligence, on the ground that banks do not owe a duty to plaintiffs. The alleged negligencj is depositing the checks without the proper inspection. Banks generally do not owe a duty, fidu iary or otherwise, to non-customers with whom they have no direct relationship. (OS Recovery,lnc. v One Groupe Int'/, Inc., 354 F Supp 357, 371n102 [SD NY 2005]). Pl~tiffs do not contes this point. Accordingly, those claims are dismissed. Fi ally, the banks challenge the sufficiency of the nineteenth cause of actionunjust enrichme I, on the ground that the complaint does not allege that the banks were enriched, or 12 [* 13] received ahy of the proceeds of the checks, and that the unjust enrichment cause of action depends on a .fitJ.Jg that plaintiffs had actual or constructive possession: of the checks. A cause of action for I unjust e~chment contemplates a situation where one party receives benefits which, in fact, belong to another party, creating a quasi-contractual obligation ofrestitution for the receiver ofthe benefits. (Marcraft Recreation Corp. v. Frances Devlin Co., 459 F. Supp. 195, 197 [SDNY 1918][citing Bradkin v. Leverton 26 NY2d 192 [ 1970]). The complaint contains no allegations that the banks were enri hed by a benefit that belonged to the plaintiffs. Assuming arguendo that the banks knowing! accepted fraudulently endorsed checks as alleged, there is still no showing that the banks received a benefit that by rights belonged to the plaintiffs. Accordingly, that cause of action is against the banks. , 'le defendants Chase, Republic First Bancorp Inc. d/b/a Republic First Bank ("Republic"), North America Holdings, Inc. d/b/aHSBC Bank ("HSBC") did not join in these motions, ons state above, the court sua sponte dismisses the causes of action for unjust enrichment against th se three bank defendants and the common law fraud and negligence causes of action against Re ublic and HSBC. The complaint does not plead causes of action for fraud or negligence against dejendants Chase. Motion Seguence 002 . Th Aizin Defendants move to dismiss the entire complaint pursuant to CPLR 3211 (a) (7) on the gro ds that the common law causes of action are based on bare legal conclusions that are not suppo ed by the undisputed facts, and that the allegations are insufficient to support either conversio or unjust enrichment. In ·s affidavit, Michael Aizin denies ever representing the plaintiffs, as alleged in the complaint. He states that he was retained to prepare pre-litigation demand letters on behalf of defendant fime Medical, and that when they ceased doing business in April 2003, he ceased performin services. Aizin states that he was never a partner in Time Medical. Aizin further alleges that hew never a party to a stipulation with plaintiffs referenced in the twenty first cause of action, and as a r suit, that cause of action is improperly pleaded against him. Aizin also contends that plaintiffs e collaterally estopped raising issue with the validity of the stipulation executed on August 20, 2003 based upon purported illegal activity of the defendants in this case. To support this 13 [* 14] i contentionl Aizin submits an order ofthe Honorable Arthur M. Schack, Justice ofthe Supreme Court ofthe Stat, ofNew York, Kings Collnty, in an action brought by Circle International Group, Irle. and Medical BiHing & Collection, Inc.againts various plaintiffs in this action, discussing the very validity of that stipLation. I Plaintiffs respond that Aizin's motion is premature because he is merely denying the factual allegations of the complaint. In the complaint, plaintiffs allege that Aizin was a partner with defendant Atlasman in + I defendant Time Medical Billing. It further alleges that Aizin induced the plaintiffs to enter into a contract him to handle collection matters that enabled Aizin and Atlasman to purloin checks payable to ,laintiffs. These allegations support plaintiffs causes of action for fraud, conversion, and unjust enri ,hment against defendants the Aizin defendants. Their motion papers simply contain denials of ese allegations. Accordingly, the Aizin defendants have not demonstrated that the complaint "ls to plead a cause of action as against him for those causes of action. Wi regards to the twenty first cause of action, the record clearly indicates that claim is not properly as erted against the Aizin defendants. Setting aside the collateral estoppel affect ofJustice Schack's o der, the court notes that the order discusses the August 20, 2003 stipulation and makes no mentio of defendants Aizin or the Law Offices of Michael Aizin, P.C. being parties to that stipulation. Plaintiffs do not deny that neither of the Aizin defendants was a party to the stipulation. According! , the court, sua sponte, grants summary judgment dismissing the twenty first cause of action as a · st the Aizin defendants only. Bas d upon plaintiffs' counsel's representation that defendant Gerald Shultz has settled his claims with plaintiffs, Schultz's cross motion for summary judgment is denied as moot. Motion Sequence 004 In otion Sequence 004, plaintiffs seek an extension of time to serve certain defendants, or to confirm c rtain defendants have been properly served. Plaintiff further seeks leave to amend the caption to c rrect the spelling of defendant GCCI LLC. This motion is granted. 306-b provides that service of a summons and complaint must be effectuated on a suit with 120 days from their filing. However, CPLR 306-b provides that the time to extended upon a showing of good cause. A plaintiff may establish good cause for the 14 [* 15] I delay by s~g forth evidence of his diligence in attempting to effectuate service. (Busler v. Corbett; 2l9 AD2d 13 [4th Dept].) Here, plaintiff seeks an exten.sion to time to serve 16 defendants, Samuel Scj1wartz, Ber Schwartz, Elizabeth Masalska, Dmitry Nikonov, George Fernandez, GCBT Services~ CCI, GCB~ LLC, GCCI LLC, Cash Payroll Express, Ruan Scher, Brian G. Reidy, David Bader, Pa Weiner, and M.T. Medical· P.C. Plaintiffs have alleged good faith efforts to serve these defendants and, in the cases of some of the corporate defendants, plaintiffs have served principals of those e tities as individual defendants in this suit. Accordingly plaintiffs' time to serve is extended t sixty days from the date of this order. Motion Seguence 005 In otion Sequence 005, the Chase defendants move to dismiss the complaint as against them and p aintiffs cross move to amend the summons and complaint to set forth additional factual ,,. allegations, add party defendants and eliminate a party defendant. RICO clai The court has dismissed the and the unjust enrichment claim against the Chase defendants above. As for the ause of action against the Chase defendants, the twenty second cause of action for injunctive elief, plaintiffs have not set forth a separate basis for the relief requested against the Chase defe , dants. Accordingly, that cause of action is dismissed as against Chase as well. Pl · tiffs motion to supplement the summons and amend the complaint and the caption is granted. H wever, the proposed amended summons and complaint name parties and contain causes of action at have been dismissed in this order. Accordingly, plaintiff is directed to serve a summons and amended complaint consistent with this order on all the parties within 30 days of e date of this order. 0 1 BRED, that, on the court's motion, the first through fifth causes of action are dismissed against all d fondants; and it is further 0 BRED, that Motion Sequence 00 I is granted to the extent that the causes of action for fraud and unjust enrichment against defendants Community Capital Bank, Repulic Fir~t Bancorp, In . d/b/a Republic First Bandk, Independence Community Bank Corp., (individually and as successor in interest to Staten Island Bancorp Inc, SI Bank & Trust, and Staten Island Savings 15 [* 16] Bank), and HSBC North America Holdings Inc. d/b/a HSBC Bank, are dismissed; and it is further O+ERED, that, in Motion Sequence 002,defendants Michael Aizin and the Law Offices of Michae\ Aizin, P. C. 's motion to dismiss is granted to the extent that the twenty first cause of action is dismissed as against them, and is otherwise denied; and it is further BRED that, in Motion Sequence 002, defendant Gerald Schultz's motion for summary judgment ismissing the complaint as against him is denied as moot, and it is further 0 BRED that Motion Sequence 004 is granted; and it is further 0 BRED that, in Motion Sequence 005, defendants JPMorgan Chase Bank, N.A. and JPMorgan bhase & Co.' s motion is granted in its entirety and the complaint is dismissed as against them; and i~ is further BRED that, in Motion Sequence 005, plaintiffs motion to amend the caption and amend summons d complaint is granted, and plaintiff shall serve an amended summons and complaint, ·th this order, on all parties who have appeared in this action within 30 days of the date of this orde ; and it is further BRED that, upon receipt of a copy ofthis order with notice of entry, the clerk is directed 0 to remove e names of Samuel Badalian and GCC LLC from the caption, to add the names I Elizabete Vilodavska a/k/a Elizabete Vlodavskaya, Jelena Bergmane, James Nimberg, Laurel Holdings, ,c., Boston Funding, Inc, A. Kleiner and GCCI LLC to the caption. March 31, 006 New York, ew York ENTER: Ls~ Karen S. Smith, J. S. C. 16

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