37 Park Dr. S., Inc. v Duffy

[*1] 37 Park Dr. S., Inc. v Duffy 2007 NY Slip Op 52671(U) [28 Misc 3d 1234(A)] Decided on December 4, 2007 Supreme Court, Westchester County Scheinkman, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 4, 2007
Supreme Court, Westchester County

37 Park Drive South, Inc., Plaintiff,

against

James P. Duffy, III and Berg & Duffy, LLP, Defendants.



16967/04



RICHARD L. DERZAW, ESQ.

Attorney for Plaintiff

477 Madison Avenue, 15th Floor

New York, New York 10022

BERG & DUFFY, LLP

By: James P. Duffy III, Esq.

Attorneys for Defendants

33 South Service Road

Suite 109

Jericho, New York 11753-1006

Alan D. Scheinkman, J.

Plaintiff, 37 Park Drive South, Inc. ("37 Park" or "Plaintiff") bringsthis action against [*2]Defendant James P. Duffy, III ("Duffy"), its former President, and his law firm, Berg & Duffy, LLP. The action was commenced by filing on November 8, 2004. Plaintiff asserts five Causes of Action: the First Cause of Action is for an accounting of Plaintiff's assets; the Second Cause of Action appears to assert claims of unjust enrichment and constructive trust; the Third Cause of Action is for breach of a fee agreement; the Fourth Cause of Action appears to be based upon fraud and non-disclosure; and the Fifth Cause of Action claims a breach of fiduciary duties.

The action originally was assigned to Hon. Kenneth W. Rudolph, then the only Justice sitting in the Commercial Division. When this Court was assigned to the Commercial Division in January, 2007, this case was administratively transferred from Justice Rudolph to the undersigned. At the time that the action was transferred to this Court, a note of issue had already been filed. Indeed, the note of issue had been filed approximately one year earlier. However, the trial of the action was delayed due to the need to obtain a properly authenticated and translated transcript of a deposition given in Liechtenstein pursuant to Letters Rogatory. Once these materials were received and the parties afforded the opportunity to review them, the Court scheduled the trial of the action. Trial proceeded before this Court, without a jury, on August 14, 2007.

At trial, testimony was received from Robert Shamis ("Shamis"), Plaintiff's present President, from Duffy, and from witness Jonathan Nissman ("Nissman"). By stipulation of the parties, the transcript of the examination before trial of Cindy Sidor ("Sidor"), a former employee of the Defendants'[FN1], and the exhibits marked thereat, were received into evidence. (Ex. 6). Further, all of the materials associated with the testimony of Mikkel Lind ("Lind"), obtained in Liechtenstein by Letters Rogatory, were received in evidence without objection. (Ex. 6). These materials include the original transcript in German, a duly certified translation, and the documents marked at the hearing.

Following the close of the evidence on August 14, 2007, the Court afforded the parties the opportunity to submit proposed findings of fact and conclusions of law, with such submissions to be made within two weeks after receipt of the trial transcript. However, delays resulted from the failure of Duffy, an attorney who is representing himself pro se, to make arrangements for payment of the court reporter's fee. On October 10, 2007, the Court was advised by Plaintiff's counsel that he had paid Plaintiff's share of the cost and was prepared to file his submissions. The Court, in response, gave a 30 day extension of the deadline to November 9, 2007, a date, which the parties were advised, was final. Plaintiff's submission was received on November 8, 2007. On that same date, Duffy transmitted a request for an extension of at least another month. Duffy claimed that, due to his travels, he was not able to send a check until October 15, 2007, that he did not actually get the transcript yet, and that he had other pressing business [*3]trips and wanted to take time off during Thanksgiving. The Court herewith denies this request and will consider the matter without a post-trial submission from Duffy. The Court will, however, consider the memorandum of law submitted by Duffy prior to the commencement of the trial.

RELEVANT BACKGROUND

Shamis is an English citizen, possessed of substantial means, who lived in Hong Kong for over 20 years. In 1989, he established an irrevocable trust which now benefits his two daughters. The trust was operated by Lind, a certified fiduciary from Liechtenstein, through a company known as Cristoballo S.A. ("Cristoballo"), which, though having an address in San Jose, Costa Rica, is managed by Lind in Liechtenstein.

In 1996 or 1997, Shamis decided to move with his family to New York. A home was located at 37 Park Drive South in Rye, New York. Lind had some prior contact with Duffy and involved him in the effort to acquire the property. For tax and other reasons, it was decided to place the ownership of the property in corporate name and to obtain a commercial mortgage. During the summer of 1997, Duffy proceeded to form 37 Park as a New York Corporation and to have 37 Park take title to the property. 37 Park is a 100% subsidiary of Cristoballo. Duffy was President and a director of 37 Park. He and another attorney with his firm were the signatories on the corporation's bank account.

An arrangement was made to have another company owned by Shamis, Loyaltex Apparel Company, Ltd. ("Loyaltex"), rent the property from 37 Park. The monthly rental payment was pegged at an amount that was slightly greater than the monthly amount due on the mortgage. The property was occupied by Shamis and his family and there were two or three employees on the property. In addition, the property was going to be renovated. In October, 1997, a fire occurred that caused substantial damage to the property.

In this action, 37 Park seeks to recover compensatory damages in the amount of $137,853, representing funds withdrawn or transferred from 37 Park's corporate bank account. In November 2000, Lind asked Duffy for substantiation for $231,108.96 in withdrawals from the account during the year 2000. Apparently, satisfactory explanations were provided as to all but $137,853, as to which Duffy contends that the withdrawals from the account were commissions for handling funds on behalf of 37 Park. 37 Park claims that no such withdrawals were authorized.

At bottom, the dispositive question here is whether the parties made an agreement pursuant to which Duffy was entitled to commissions on funds handled for 37 Park and, if so, whether the amount withdrawn was greater than the amount, if any, to which Duffy was entitled. During the course of the trial, certain points were [*4]conceded. First, the parties agreed that the amount in question is $137,853[FN2]. Second, it was undisputed that all of the withdrawals were by Duffy or at his direction. Third, while some of the withdrawals went to Duffy directly and some went to his law firm, this was a distinction without a difference as Duffy and his firm are one and the same and there are no other partners whose rights would be affected.[FN3] Fourth, it was undisputed that no part of the $137,853 was or is claimed to be due or payable on account of legal services.

THE TRIAL EVIDENCE

A.The Operation of 37 Park

37 Park acquired title to the property on August 26, 1997. The purchase price was approximately $2 million. Approximately one-half of the purchase price was financed by a mortgage from GreenPoint Bank. A formal lease between Loyaltex and 37 Park was entered into. Duffy and his law firm provided legal services in connection with the establishment of the corporation, the acquisition of the property, and the leasing arrangements.[FN4] There is no dispute that Duffy was to be paid, and was paid in full, for these legal services.

At this juncture, the Court notes that, on August 3, 2007, it entered an Order precluding Defendants from offering evidence as to documents that they had not produced during discovery, despite demand for such production. The documents not produced apparently included the firm's billing records. However, bills were sent to Lind and were retained by him and are included in the exhibits marked during Lind's testimony and, therefore, are before the Court as part of the Lind transcript and records, which were offered into evidence by Plaintiff. [*5]

A checking account was opened for the corporation, on which Duffy had signatory authority. The statements on the account were sent directly to Duffy. Statements were not sent to Lind or Shamis by the bank.

Berg and Duffy issued a bill to 37 Park on September 4, 1997, addressed to the corporation at Lind's Liechtenstein office. The bill, totaling $11,959.41 was for services relating to the acquisition of the property and related matters. On September 8, 1997, Duffy wrote Lind to report on the status of the matter, indicating that he was waiting for the return of the signed lease and some other information and that thereafter "everything should be pretty much a matter of routine". In this letter, Duffy suggested that, with Lind's agreement, starting in October, "we would propose to charge a monthly fee of $130 for attending to collecting the rent, paying the mortgage, and other similar routine matters. Legal work for maintaining the Corporation in good order and other legal work would be billed separately." In his testimony, Lind indicates that he accepted this proposal. "I refer here to a letter from Berg & Duffy dated 9/8/97, which is attached to the transcript as an attachment. In the starting phase we paid for invoices of approximately US $35,000.00. Thereafter, only US $130.00 should have been due. Unusual work was exempted from this fee."

On September 9, 1997, Duffy wrote to Lind indicating that he had received a bill from the alarm company and a telephone request from Shamis to have it paid. Duffy stated that he would be "happy to pay it, but we would like to have your authorization to do so first." He also suggested that it might be better to have Loyaltex pay the bill. He concluded by asking "[p]lease give us instructions as to how to proceed."

On September 15, 1997, Duffy sent Lind the invoice from the alarm company for 12 months of service. He stated that, "[o]nce again, we will need someone's authorization to pay these charges" and suggested that Loyaltex, as tenant, might be a more appropriate payer.

On September 25, 1997, Duffy wrote to Lind with a further report on the corporation, the mortgage, the lease, and other matters. Among other things, he reported that there would probably be surplus funds in the account and that he would transfer them to an interest bearing account. He also indicated that "we have asked for instructions to pay for certain improvements to the property. Thus far, we have heard nothing one way or the other. If the corporation should make these payments, would you please authorize them as soon as possible." A second letter of the same date forwards an invoice from the alarm company and states that the invoice is the third one received and "we continue to await instructions as to whether it is appropriate to pay these or not".

Duffy continued to perform services with respect to the property and continued to send bills to the corporation in care of Lind in Liechtenstein. A bill was issued dated October 2, 1997 in the amount of $2,791.43, for services which principally [*6]related to the acquisition and leasing of the property, as well as a bill dated November 3, 1997 for $1,081.02. The bill dated December 1, 1997 indicates that Duffy was becoming involved in other matters. The December 1, 1997 bill contains charges attending to a statement from an architect, a follow up with Shamis, and follow up with the payment of the bill. The December 1, 1997 bill was for $177.04.

Bills were rendered by Duffy in January and February, 1998. These bills reflect activity relating to the architect as well as a telephone conference with Lind in December, 1997, regarding the need for additional capital contributions to cover anticipated construction and other costs. On February 28, 1998, Lind wrote to Duffy to report that he had authorized payment of his February invoice and that he had recently transferred $15,000 into the 37 Park account, $10,000 of which was to be used to pay an architect's bill. He also pointed out that he had continually received bank statements and other correspondence because "your office each time takes the trouble of writing a separate covering letter". Lind suggested that, to avoid too much administration and correspondence, Duffy's firm should:

a)collect of the statements, mail and other correspondence and send copies of only relevant documents once every six months;

b)communicate to Cristoballo by fax only as to matters of urgency; and

c)bill only quarterly or every six months, i.e., send the bill with the documentation package.

Notwithstanding this request, Duffy's firm sent Lind a bill dated March 2, 1998. This bill is noteworthy in that it indicates that a charge, on February 20, 1998, for $32.50 for one-tenth of an hour of Duffy's time to "attend to Mr. Shamis' request to pay various bills and related matters" and another charge, also for one-tenth of an hour, attending to the payment of an architect's bill. On March 17, 1998, Lind wrote to Duffy, noting that he was receiving on a "continuous" basis correspondence and statements relating to the corporation" and, therefore, he assumed that Duffy had not seen his letter of February 20. Lind forwarded a copy of his February 20 letter and asked Duffy to confirm that new routine he suggested would be acceptable.

A bill was rendered dated July 2, 1998 which contained time charges for activity relating to insurance premium increases by Chubb, attending to paying for charges for the architect, dealing with the payment of real estate taxes, and efforts to replace the Chubb insurance policy. The bill also reflects a conference within the Duffy firm (involving Duffy, Sidor, and a third person) as to Lind's instructional letter regarding mailings. The July 2, 1998 bill indicates that Duffy was involved in the development of a contract with PDG Enterprises for the renovations to the property. PDG Enterprises is [*7]the company with which witness Jonathan Nissman is affiliated.[FN5] Duffy also charged for reviewing the company's monthly bank statement and for dealing with the wiring of funds.

The firm rendered a bill dated January 15, 1999 which covered a period dating back to June 15, 1998. The January 15, 1999 bill includes charges for confirming the receipt of funds, attending to paying invoices, reviewing the status of the company's bank account and dealing with construction and real estate tax issues. This bill was the last rendered by Duffy or his firm.

On April 22, 1999, Sidor forwarded to Shamis: the May 1998 to December 1998 bank statements, a copy of the 1997 corporate income and franchise tax returns, and the January 15, 1999 invoice. There is no indication that Duffy, Sidor or anyone else provided any documents of significance to Shamis or Lind after April 22, 1999 until the dispute arose between the parties.

The bills, as well as letters to and from Lind, indicate that funds were wired in and disbursed only with the approval of Lind and/or Shamis. As but one illustration, on June 19, 1998, Lind wrote to Duffy indicating that $100,000 had been wired to the account and giving instruction as to how to disburse the funds. Specifically, Duffy was told to use $10,000 to pay the architect and to pay "various bills upon receipt — provided Mr Shamis has checked these and approved them by signature".

On January 22, 1998, Duffy wrote Lind to suggest that it would be best to establish a schedule of anticipated expenses and then make provision for payment, as by periodic capital contributions. He pointed out that the rental payments from Loyaltex "essentially cover the mortgage payments, accounting and legal costs, and a small reserve. Thus, if all the corporation receives is the monthly rent, it will not be able to meet these ongoing additional expenses." It does not appear that this suggestion was accepted. Rather, it appears that Lind and/or Shamis adopted the practice of wiring in amounts just sufficient to cover particular expenses. For example, on October 20, 1998, Lind wrote Duffy that he had authorized a transfer to 37 Park of $100,000 and that an $80,000 invoice expected from PDG Enterprises was to be paid upon receipt. On December 2, 1998, Lind wrote Duffy that he was authorized to pay a $108,431.92 invoice from PDG Enterprises and that $110,000 was being wire transferred. On December 14, 1998, Lind informed Duffy that he was authorized to pay a PDG Enterprise invoice of $71,970.10 and that $72,000 was being wired to the account. [*8]

Duffy acknowledged in his testimony that the wire transfers were typically made at the last minute. He pointed to the exhibits to Lind's testimony and stated that there was a "constant problem". "We were always quite behind on money and it was always arriving at the very, very last minute." Duffy said that it was always "very, very difficult" dealing with vendors because we were always short on money and whenever money would come in it was always all committed, it was basically gone."

In terms of process and administration, Cindy Sidor, an employee of the firm, would write out checks at Duffy's direction and present them to Duffy, or to Dennis Carletta (an associate who was also a signatory on the account) for signature.

In October 1999, a fire occurred at the premises owned by 37 Park. An insurance adjuster named Dennis Panico was involved in obtaining the insurance recovery. Panico was paid a commission of 10% of the insurance proceeds. Eventually, $2.6 to $2.7 million dollars was received from the insurance company. Shamis was instructed by Cristoballo to work on the repairs and renovations and award the necessary contracts. Shamis was not given authority to sign checks. Duffy was given the task of coordinating payment and releasing the payments. As a result of the arrival of the insurance proceeds, Lind's role in providing the funds for the expenses of 37 Park was diminished considerably.

In the period from March 2000 to September 2000, $137,853 was paid out of the 37 Park Avenue checking account to either Duffy or to his law firm. Exhibit 1 to the examination before trial of Cindy Sidor shows that on March 6, 2000, a check was signed by Duffy to his firm for $27,007.43. The memo portion of the check indicates that the funds were attributable to "legal fees 6/1/99 to 2/28/00." The same exhibit reflects a check dated May 31, 2000, signed by Duffy, payable to the firm for $10,000 in payment of fees. On June 30, 2000, a check for $10,000 was written to Berg and Duffy and signed by Duffy. On July 31, 2000, a check was written to Berg and Duffy for $12,500, with the memo indicating that the check was for "Services rendered"[FN6]. On August 25, 2000, a check was issued to the firm for $18,333.33 and signed by Duffy[FN7]. On September 10, 2000, a check was issued to the firm and signed by Duffy for $25,000 (there is no statement on this check as to its purpose).

According to Sidor, from 1999 through 2001, Berg and Duffy had difficulty paying its bills and meeting its payroll. Duffy directed Sidor to write checks to the law firm on the 37 Park account without giving her an invoice, a practice that she found unusual. Duffy acknowledged that his firm was having some financial, cash-flow, [*9]problems in 2000. He also acknowledged that he was having personal financial problems that year due to the illness of his wife and attendant medical expenses.

At some point after the fire, Sidor received a telephone call from Shamis and, while she did not know the details, she knew the argument concerned payments out of the 37 Park account.

B.The Alleged Commission Agreement

Duffy contends that when his firm was first engaged, he perceived that the engagement would be limited to forming the company and acquiring the property, at which point they would pass out of the picture. He claims that, after the purchase of the property was completed (which occurred in August, 1997), Lind suggested that he remain in office longer. Duffy says that on September 2, 1997, Shamis called him and discussed the company's undertaking a significant renovation of the property. Duffy testified that he told Shamis that, if he was to get involved in this, then it would be necessary that he be paid a fee or commission based on the value of the activities. He claims that he told Shamis that there were "great risks associated with doing things of the type that Mr. Shamis had indicated for which the pure time of legal work would not adequately compensate." According to Duffy, he told Lind about this and that Lind agreed that he should be paid for paying the mortgage. Duffy testified that Lind asked him to write a letter requesting that there had been negotiation about the commission amount and that they had agreed on 1%. Since the mortgage or lease payment was $13,000, 1% of that would be $130.00. Duffy claims that he also spoke to Lind about Shamis' request for broader participation and told Lind that he was reluctant to do this broader work. Though purportedly recounting a conversation with Lind, Duffy asserted that Shamis told him, and that he told Lind, that Shamis knew many attorneys who would do this sort of work as a courtesy because of the volume of legal work he could direct to them. Lind told Duffy, says Duffy, that if Shamis could find someone else, Duffy could pass out of the picture.

Shamis then got back to Duffy and told him that he had not been successful in finding an attorney to do the work for nothing. Duffy began to get bills for various improvements. Duffy claims that, "with these developments, Mr. Lind agreed with me that we would also be entitled to a commission on the transaction costs of the various activities that Mr. Shamis wanted us to undertake at the property, and these were quite extensive over the years." According to Duffy, Lind agreed to pay Duffy a 5% commission on the expenditures he made on behalf of 37 Park. Duffy claims that this conversation took place "in the early part of September of 1997." Duffy also claims that Lind told him not to be speaking about this with Shamis as he, Lind, was the decision-maker. Duffy says that, prior to the fire (which is when the conversation is claimed to have occurred) Lind was effectively calling the shots because he was paying for it all. Duffy claimed that the commission was not just attributable to the renovations, but to all expenses paid out, including for pool maintenance, gardening, telephone [*10]service, and the domestic staff.

Duffy testified that he did not want to undertake this assignment — "We were lawyers, we're not check writers" — and did so only because a very good friend of his, Lind, asked him to. He also said there was risk involved, saying that some of the bills were issued directly to him and that, when bills were not being paid, he was the person who was contacted. He also testified that he was named as a party in one lawsuit and threatened with two others. He stated that the agreement was not put in writing because he had a high degree of confidence in Lind, that virtually all of the deals he does in this area are done on handshakes, and that it was not unusual to operate in that fashion because of Swiss and Liechtenstein banking secrecy.

Duffy claims that, after the fire, Lind "indicated to us" that since "people were going to have to look more to the insurance proceeds than to him, that we should be — we should protect ourselves and there was never enough money to pay the sorts of commissions that were due." Duffy testified that as he got closer to the end, he "began to realize that we were owed quite a bit of money that it was necessary, according to Lind, to get that out, the source of the money, so that we caught up with the monies that were due...."

On cross-examination, Duffy testified that he never sent out any invoices for either a 5% or a 1% commission. Duffy also acknowledged that substantially all of the payments he issued out of the 37 Park account were authorized either by Shamis or by Lind. While there was no need for specific authorization for recurring payments (such as payments for salary or for medical insurance premiums for employees), the large bills from the architects and the construction companies were approved by Shamis or Lind.

Shamis testified that he did not make any agreement with Duffy for commissions. He said that, at the beginning, when bills came in he would have Lind or the bank wire funds to Duffy and he would turn the bills in to Duffy's office for payment. He said that he followed this procedure, even though he was living in the house, because he is not an American citizen, because of the overseas irrevocable trust, and because, in Hong Kong where he had lived for 27 years, it is normal "to have attorneys handle secretarial duties".

Shamis acknowledged, in response to questions from the Court, that if he was controlling the trust funds, there could be an issue as to whether the trust was irrevocable and tax consequences could ensue. While he acknowledged that it was worth the administrative issues in order to achieve the desired tax result, he did not look at it that way. Rather, he viewed it as normal, based on his experience in Hong Kong, to have other people pay bills for him. Shamis testified that he did not agree to pay for Duffy to pay the bills and that, if Duffy had asked for a commission, he would have had enough friends in New York that he could have found an attorney or someone else to do it. Shamis stated that he assumed that Duffy was charging an hourly rate and that [*11]was it.

Lind testified that there was no agreement to pay Duffy other than the agreement at the beginning to pay him $130 per month and pay for unusual work. He also testified that Shamis never told him that Shamis had agreed to any other arrangement.

C. The Dispute Arises

According to Shamis, in October or November, 2000, he was unhappy with Duffy's services, as he had been dealing only with a staff person and because Duffy was unable to get insurance proceeds from the bank, which was an additional payee on the fire policy. He got the payments and arranged for his accountant and lawyer to take over the books of 37 Park. He called Sidor and found out the balance in the account. Later, he received a telephone call from Nissman and then spoke to Cindy directly. Cindy told him that for the preceding six months Duffy had been writing checks to himself and to Berg and Duffy to cover his and his firm's financial difficulties. Sidor acknowledged having conversations with Shamis but, as noted, did not recall the details.

In any event, on October 31, 2000, Lind wrote to Duffy stating that the administration of 37 Park would be shifted to Neil Millman and that the directors should resign, to be replaced by Shamis. The next day, November 1, 2000, Duffy responded in writing by expressing relief at the developments and the impending change and telling Lind that he was preparing an indemnification agreement, indicating that this was prompted by a lawsuit brought by a worker injured on the premises in which he was named personally. On November 3, 2000, Duffy's office sent Lind a draft indemnification agreement and, three days later, sent a revised draft proposing a broader scope to the indemnification.

On November 8, 2000, Lind wrote to Duffy, stating that he had been made aware that $231,108.96 in payments had been out of the 37 Park account for which information or explanation was lacking. He asked for Duffy to supply documentary substantiation.

On November 15, 2000, Duffy responded in writing. Curiously, he regarded the November 8 inquiry as an inquiry about the "agreed to commissions", though Lind's inquiry did not mention commissions. In any event, he wrote that it was "completely incomprehensible" that no one was aware of the arrangement. Despite the fact that the November 8, 2007 asked only for documents, Duffy construed the request as a threat — "I also find Robert Shamis' threats to be outrageous and incredible" and seemingly made one of his own — "Should he continue to proceed as he has indicated to me, I suspect he will have some extremely serious problems to deal with in the [*12]future. I will not take these matters lightly."[FN8]

In any event, Duffy went on to state that there was an original agreement for $130 per month. He then went on state the following: Since Robert Shamis seems to have forgotten everything, it might be good to recount some history. Initially, after getting things set up, we, acting as directors and officers of the corporation, were simply to collect monthly rent from Robert Shamis' company Loyaltex and to pay the Greenpoint mortgage on the property the corporation owned at 37 Park Drive South in Harrison, New York, (I will refer to that property as "the premises" in the rest of this letter.) The commission for this was agreed at 1% of the amounts collected, or $130 per month, the rental payment being $13000 per month. These commissions were separate from, and independent of, legal fees, and they were paid on an ongoing basis."Not too long after these initial arrangements were made, Robert Shamis wanted us, again acting as directors and officers of the corporation, to assume substantial additional responsibilities that included, among other things, the extensive improvement of the premises, the hiring of a number of domestic employees at the premises, the payment of certain expenses related to the operation and maintenance of the premises, as well as the making of other payments Robert Shamis requested from time to time. We reluctantly agreed to do this; however, we told Robert Shamis it was necessary to make a substantial adjustment to the commission rate for these additional matters. I specifically told Robert Shamis these additional duties and responsibilities were more in the nature of what an executor, trustee, or receiver might do. Thus, we requested a commission of 5% which corresponds to the maximum statutory rate for executor's commissions. Robert Shamis agreed to this. Once again, these commissions were separate from, and independent of, legal fees."

In addition, Duffy sent Shamis an e-mail that same day, in which he said [*13]that it was his position that his firm was still owed substantial fees and commissions. He added: If you would like to discuss this, I would be happy to do so. If you would rather fight about it, we can do that as well. It might be better for all concerned if we could come to an agreement about what additional is due and how it should be paid, but I do not agree with your method of trying to negotiate. It will not produce the desired result, and it will probably come back to cause serious problems for you.

This response by Duffy is of great concern to the Court. As will be developed herein, he never accounted for what monies he kept, much less established any entitlement to any more "commissions" and there was no effort to prove any "fees". Moreover, apart from making a demand that appears to be wholly unauthorized, he coupled that demand with scarcely veiled threats — by making statements that seem to imply that Duffy had information that would be adverse to Shamis, perhaps in reference Shamis' significant and direct post-fire involvement with monies or assets that would be attributable to a supposedly irrevocable trust.[FN9] Further, these statements come literally out-of-blue in response to a very mildly (and appropriately) worded request for an explanation. Duffy's response is totally disproportionate to the request. The Court views the statements made by Duffy on November 15, 2000 as an effort to try to intimidate Shamis and Lind from pressing an inquiry into the withdrawn funds.

Nothing further seems to have occurred until February 12, 2001, when Lind wrote to Duffy, referring to the October 31, 2000 correspondence and requesting documentation of the change in the directorship of the company. A second copy of the February 12, 2001 letter was sent on February 21, 2001. It does not appear that Duffy responded. On March 21, 2001, Lind notified Duffy that Duffy had been removed and discharged for cause from the Board of, and as President of, 37 Park and demanded that Duffy turn over all corporate records to Millman.

ANALYSIS OF THE FIRST AND FOURTH CAUSES OF ACTION

The First and Fourth Causes of Action asserted by 37 Park sound in accounting. Duffy admits the allegation of Paragraph 15 of the Complaint which alleges [*14]that he, as President of the corporation, had a fiduciary duty and duty to of loyalty to the corporation. Duffy, as an officer and director of 37 Park, owed a fiduciary duty to 37 Park.

It is well-established that directors and officers of corporations, in the performance of their duties, stand in a fiduciary relationship to their corporation, owe the corporation their undivided loyalty, and are not permitted to derive a personal profit at the expense of the corporation. Schacter v. Kulik, 96 AD2d 1038, 1039 (2d Dept. 1983); Adirondack Capital Management, Inc. v. Ruberti, Girvin and Ferlazzo, P.C., 43 AD3d 1211 (3d Dept. 20070: Matter of Greenberg, 206 AD2d 963, 964 (4th Dept. 1994). The dealings of an officer or director with corporate assets are subject to close scrutiny and must be characterized by absolute good faith. Matter of Greenberg, supra , 206 AD2d at 964. For example, where a corporate president and treasurer unilaterally seized all the corporate assets, entered into a royalty agreement on behalf of his own solely-owned new venture for the manufacture and sale of products to which the corporation had patent and trademark rights, and proceeded to carry on the business of the corporation in the name of his new entity, it was held that the officer should be compelled to account for his improper conduct in violation of his fiduciary obligations. Schacter v. Kulik, supra .

Of moment here, in Sorin v. Shahmoon Industries, Inc., 30 Misc 2d 408 (Sup. Ct. NY County 1961), the esteemed Justice Matthew M. Levy ruled that a corporation is entitled to an accounting, even to the last penny, from an officer or agent who has been entrusted with its property without having to first establish any misappropriation. In that case, the Court held that a corporate official who expends corporate funds is accountable for them, as are directors who acquiesced in their outgo. There, the Court held that a corporate official had to account for amounts taken from the corporation, or reimbursed from the corporation, on account of claimed expenses for travel, entertainment and gifts.

More recently, in Southeast Chrysler-Plymouth, Inc. v. Pieroni, 96 AD2d 745 (4th Dept. 1983), appeal dismissed, 60 NY2d 702 (1983), summary judgment was granted to a corporation against a corporate officer who, approximately three weeks before he resigned, removed a blank check from the corporate account book without authorization, had the sales manager cosign it, made it payable to himself and signed it, and had the check negotiated and deposited in a separate account. The Court held that, on these facts, the corporation was entitled to recover for conversion, breach of fiduciary duty, and breach of contract.

The Court finds that 37 Park is entitled to recover against Duffy and his law firm on its causes of action for an accounting. It has been said that the burden to account is on the officer. Sorin v. Shahmoon Industries, Inc., supra . But even if it is assumed arguendo, that the burden of proof is on Plaintiff, Plaintiff has more than carried it. The Court accepts and credits the testimony of Lind that the agreement as to [*15]Duffy's compensation was that Duffy was entitled to $130 per month plus a fee for unusual work. By this, the Court finds that unusual work was to be either legal work or services other than routine bookkeeping, which work would be itemized in specific bills rendered.

While the assessment of Lind's testimony was somewhat hindered by the fact that his testimony was given overseas and he did not testify in person, his testimony is corroborated by both Duffy's own September 8, 1997 letter as well as by the documents provided by Lind. The record shows that, from the inception of the arrangement in September 1997 through April, 1999, Duffy both: (a) requested specific authorization for the payment of non-recurring bills; and (b) rendered specific, detailed bills for his services, including services related to his review and payment of bills and his review of the corporate account statements. The Court notes that, while the bills rendered by Duffy were paid, there was no evidence that the payments came from 37 Park directly. The records submitted do not indicate that Lind ever simply authorized Duffy to use the 37 Park account to pay the bills. Indeed, the records show that some of the bills were paid somewhat late, indicating that Duffy did not take it upon himself to use the 37 Park account to pay his own bills, but rather awaited payment from Lind. The requests by Duffy for specific authorization for non-recurring expenses and the rendering of specific, itemized bills for his own services is consistent with Lind's testimony that the agreement was for a modest $130 per month allowance for bookkeeping services and for payment for anything else dependent upon the presentation of appropriate and itemized bills. Lind's testimony is also consistent with the testimony of Sidor that she would prepare the bills for Duffy's signature. A $130 per month charge for the services of a bookkeeper seems entirely appropriate. The Court also notes that Lind's testimony that the agreement was for a $130 per month charge for bookkeeping is also consistent with Duffy's testimony that the initial agreement was for a $130 per month charge.

The Court does not accept Duffy's claim that the initial agreement was later modified to provide for a 5% commission. Having had the opportunity to observe Duffy as he testified, and as he participated in the proceedings (including observing him as he both watched Shamis give his direct testimony and as he cross-examined Shami), the Court finds that Duffy is simply not credible on this point, as an examination of the documentary evidence, and his own testimony, confirms.

In his letter of November 15, 2000 to Lind, Duffy claimed that he made an agreement with Shamis for a 5% commission. Shamis testified that he made no such agreement with Duffy and the Court believes him. Shamis is a forceful and articulate international businessman who clearly has access to assets well beyond the scope of the amounts involved here. The Court credits his testimony that he is pursing his matter because he is offended at having been taken advantage of. The Court notes that neither Lind nor Shamis ever questioned any of the bills rendered by Duffy (though some were not immediately paid), though close examination of the bills indicate that some of the charges are subject to question (such as the billing for charges relating to [*16]services in connection the acquisition of the property which would appear to be at least potentially duplicative of the services rendered by the attorney who actually handled that matter, Leonard A. Weiss of Martino and Weiss.). The Court believes Shamis when he states that he would not have sued if he had agreed to the arrangement claimed by Duffy.[FN10]

Duffy's claims are internally inconsistent and contradicted by his own writing. As noted, Duffy's November 15, 2000 letter claimed that the agreement for a 5% commission was made with Shamis. In his direct testimony, Duffy testified that the agreement for the $130 per month commission was made with Lind who asked him to put his proposal in writing. While 37 Park now claims that Duffy's September 8, 1997 letter was simply a proposal which was not acted upon or accepted, the Court does not agree. Rather, the Court credits Lind's testimony that the September 8, 1997 lettter, though couched in tentative language, reflected the actual agreement reached orally between Lind and Duffy prior to the issuance of the letter. Duffy contends that, notwithstanding the agreement for $130 per month, Shamis, in this very time period, directly asked him to do more and he asked for more money and that, after trying to find others to do the work, contacted him and agreed to Duffy's request for a 5% commission. Duffy subsequently placed his initial conversation with Shamis as having taken place on September 2, 1997. Given the documented fact that Duffy placed the $130 per month arrangement in writing on September 8, 1997, given the documented fact that all through 1997, Duffy made repeated requests for specific authorization to pay various bills, given the documented fact that all though 1997 Duffy rendered specific bills for services, including services in reviewing the bank records and paying bills, given the documented fact that Duffy through 1997 forwarded the bank statements and other records to Lind, the Court finds that there was a then-established practice of putting the financial arrangements in writings sent by Duffy to Lind. Had there been an change in the agreement for Duffy's commission, it would have been placed in writing. That there was no such writing belies Duffy's present claims.

Moreover, Duffy also claimed that his agreement for a 5% commission was made with Lind, not Shamis, and that Lind told him not to speak to Shamis about it: [*17]

THE COURT:Before you go forward to what Mr. Lind indicated to you after the fire, you say that Mr. Lind agreed to pay a commission based on the transaction costs?

MR. DUFFY:Yes.

THE COURT:What does that mean?

MR. DUFFY:A five percent commission.

THE COURT:On what?

MR. DUFFY:On the expenditures that we made on behalf of 37 Park South in the renovation of this property and its operation.

THE COURT:Can you tell me when, I guess, between 1997 and the time of the fire in 1999 when this conversation with Mr. Lind took place?

MR. DUFFY:It was in the early part of September of 1997.

THE COURT:Did you ever speak to Mr. Shamis about this?

MR. DUFFY:No, Mr. Lind was very definite that he was the one who was making these decisions and he really did not want me to be discussing these things with Mr. Shamis.

Duffy further testified that it was not until after the fire in October 1999 (two years later) that he was told by Lind that Shamis was going to play a different role and that up until then Lind was "effectively calling all of the shots because he was paying for it all."

Duffy's claim that he made the 5% commission agreement with Lind, not Shamis, of course, flatly contradicts his claim that he made the 5% commission agreement with Shamis. The claim that the agreement was made with Lind in early September 1997 is also contradicted by Duffy's own September 8, 1997 letter to Lind and by his practice of sending bills to Lind for his own services and requesting specific authority for payments.

The claim that there was an agreement for the payment of a 5% commission made in September 1997, whoever it was made with, is flatly contradicted by the fact that through 1997 and 1998 and into 1999, Duffy billed for the very services that he claims were to be compensated via the commission. [*18]

Duffy never submitted, either prior to the dispute, prior to trial, or at trial any documentation as to how he computed the supposed commission. The history of detailed bills through January 1999 shows that when Duffy charged for his service he did so by invoice and that he did not simply pay himself. The total lack of contemporaneous documentation of the calculations belies his claim. No evidence was submitted to show that he ever notified Shamis or Lind that he was taking the money and the basis for such taking. Rather, the evidence shows that he stopped sending records and documentation in April 1999. While Lind essentially complained relatively early on that Duffy was sending him too much documentation, Lind did not request that documentation cease — rather he requested that documentation be sent quarterly or semi-annually. That, insofar as the record indicates that documentation ceased after April 1999 and the withdrawals began in March 2000, reflects an intention to withhold from Lind and Shamis the fact that Duffy was making the withdrawals, a secrecy that reflects a lack of authorization.

Further, the harsh demands and implied threats made to Lind and Duffy on November 15, 2000 reflect an effort to try to intimidate them into refraining from pursuing the matter of the withdrawn funds — an effort that the Court finds was made with knowledge by Duffy that his withdrawals were without basis.

DR 9-102(c) of the Code of Professional Responsibility requires that attorneys maintain complete records of all funds of a client or third person coming into their possession and render appropriate amounts to the client or third person. 22 N.Y.C.R.R. §1200.46 (c). Plainly, that requirement was not observed by Duffy. While Duffy did provide, prior to this action, to an attorney then representing Plaintiff some explanations or accounting with respect to the larger amount of $231,108.96 initially questioned by Lind in his letter of November 8, 2000, that material was not submitted to the Court and it is apparent that no explanation of the $137,853 balance ever was provided. The Court notes that the request for an explanation was made less than two months after the last withdrawal and an accounting could surely have been provided. To the extent that Duffy would suggest that he later destroyed or failed to keep the records, it is clear that as of November 8, 2000, he was on notice that he would be required to account.

The Court further notes that Duffy wholly failed to explain how the $137,853 sought by 37 Park can be justified under the claimed 5% commission agreement. He claimed that the commission was taken on $8 million to $9 million in payments. Not being able to quantify even the gross amount on which commissions were taken is a serious shortcoming. Further, a 5% commission on $8 million would be $400,000. Duffy made no claim that he was entitled to more and never related the $137,853 to a claimed commission entitlement of $400,000 minimum.

The Court considered the possibility of allowing Duffy a credit of $130 per month for each month from September, 1997 to March, 2001. However, the Court cannot exclude the possibility that this sum was, in fact, paid out of the corporate [*19]account. Since the records were not produced, and Duffy did not offer any evidence in support of any such offset, the Court will not grant it. Indeed, if the $130 per month figure (which would aggregate $5,590 for the 43 months involved) could account for some of the $137,853, it was Duffy's obligation to demonstrate that.

For these reasons, the Court would find that 37 Park has proven its case under the First and Fourth Causes of Action. However, as discussed infra, there is the small matter of the statute of limitations.

ANALYSIS OF THE THIRD CAUSE OF ACTION

The Third Cause of Action alleges breach by Duffy of a fee agreement, which the Complaint describes as an agreement to pay for legal work at the firm's regular hourly rates. The Third Cause of Action also contains allegations of unreasonable fees and dishonesty. For the reasons previously stated, the Court finds that there was an agreement pursuant to which Duffy and/or his law firm was to be paid $130 per month and for legal services as billed.

Additionally, while not directly pleaded by Plaintiff, the Court finds, as a matter of fact, there was an agreement under which Duffy would not take out any funds from 37 Park's accounts without the express authorization of Lind or Shamis. Furthermore, even if there was no express agreement, the law would imply an agreement to return money where a party possesses money that equity and good conscience require the party not be permitted to retain and which belongs to another. See, e.g., Board of Education of Cold Spring Harbor Central School District v. Rettaliata, 78 NY2d 128, 138 (1991).

Accordingly, the Court will sustain so much of the Third Cause of Action as alleges that the $137,853 was taken by Duffy in breach of an agreement of the parties. Southeast Chrysler-Plymouth, Inc. v. Pieroni, 96 AD2d 745 (4th Dept. 1983), appeal dismissed, 60 NY2d 702 (1983). The elements of a breach of contract claim are (1) the making of an agreement; (2) performance of the agreement by one party; (3) breach by the other party; and (4) damages. Furia v. Furia, 116 AD2d 694 (2d Dept 1986); accord, Ascoli v. Lynch, 2 AD3d 553 (2d Dept. 2003); PJI 4:1. These elements have been established to the extent indicated. The Court finds that there was an agreement under which Duffy was not permitted to withdraw funds from the corporate account without permission, that Duffy violated this agreement to the extent of $137,853, that Plaintiff complied with the provisions of the agreement on its part to be performed, and that Plaintiff has been damaged. Thus, the Court would, in the alternative to the accounting claims previously addressed, also predicate its decision on the Third Cause of Action to the extent of finding that Duffy and his law firm breached the agreement to the extent of unauthorized withdrawals of $137,853.

ANALYSIS OF THE SECOND CAUSE OF ACTION

The Second Cause of Action asserts that the ministerial services performed by Duffy and/or his law firm could and should have been performed by a non-attorney at the rates charged by clerical personnel. It is claimed that the alleged commissions represent unreasonable and excessive compensation. It is also claimed that Defendants have been unjustly enriched and that a constructive trust should be imposed.

The Second Cause of Action is sustained to the extent that it is based upon unjust enrichment and constructive trust. Four elements are essential for the imposition of a constructive trust: (1) a confidential or fiduciary relationship; (2) a promise, express or implied; (3) a transfer in reliance thereon; and (4) unjust enrichment. See, e.g., Crown Realty Co. v. Crown Heights Jewish Community Council, 175 AD2d 151 (2d Dept. 1991); Panish v. Panish, 24 AD3d 642 (2d Dept. 2005). These elements have been satisfied. Duffy owed the corporation a fiduciary obligation. The corporate accounts were entrusted to him upon a promise, inherent in the relationship, not to usurp them for his own benefit. Further, there was an express agreement that limited his entitlement to any funds from the corporation. Duffy has breached his promise and would be unjustly enriched if permitted to retain the funds in question.

ANALYSIS OF DEFENSES

A.Issue or Claim Preclusion

Defendants' answer asserted a defense based on issue or claim preclusion. This defense arises from the apparent commencement in 2001 of an action in New York County by Shamis and 37 Park against Duffy, his law firm and several insurance companies. While the answer pled this defense, no pre-trial motion was made to assert it, either by motion to dismiss or by motion for summary judgment. However, Duffy's trial memorandum raised the issue of the New York County action. During the one-day trial, however, Duffy did not have a copy of the New York County pleadings. Duffy had asked that, for personal reasons, the Court not hold session the following day. At one point, when it appeared that the case would not be completed in one day, the Court held out the possibility that it would permit Duffy to offer the New York pleadings on the next court session. However, when the case was otherwise completed within the single day, the Court declined to continue the trial to afford Duffy the opportunity to produce the New York County pleadings. It was the Court's view then — and now — that Duffy, who was acting as his own lawyer, should have been prepared with that material at the start of the case. The Court noted then — and notes now — that if Duffy was that persuaded that the prosecution of the present case was precluded by the prior New York action, he should have raised it in a timely way, rather than allowing the entirety of the case to proceed through discovery and through trial. This is particularly significant in this case where the action was awaiting trial for some 10 months pending arrival of a properly authenticated and translated transcript of Lind's [*20]testimony. Rather than put Plaintiff through an expensive and prolonged process of obtaining testimony from a witness in a foreign country, Duffy had an obligation to raise the issue promptly. While it may be technically correct that pleading it in the answer is sufficient to assert the defense, Duffy should have been prepared to proceed with the defense at the appropriate time.

In any event, according to Plaintiff's counsel, the issue in the prior litigation was a claim by 37 Park and Shamis that Duffy failed to secure proper homeowner's fire insurance coverage on the property. The events in question in the New York action necessarily had to involve the period prior to the fire, which it is undisputed occurred in October, 1999. The withdrawal of the funds at issue in this case occurred well after that date. While CPLR 601(a) permits a plaintiff to join in a single action as many claims as he may have against the adverse party, that authority is permissive — not mandatory. Res judicata precludes a party from maintaining an action where a prior judgment on the merits exists involving the same subject matter. Matter of Hunter, 4 NY3d 260, 274 (2005). To determine whether the prior action involves the same subject matter, the courts apply a transactional test, i.e., the inquiry is whether the past and present claims arise out of the same transaction or series of transactions. Id. The bar, therefor, does not apply where the second action presents different foundational facts from the first. Rodden v. Axelrod, 79 AD2d 29 (3d Dept. 1981); accord, Matter of Cobb v. Lombardi, 269 AD2d 172 (1st Dept. 1999). Res judicata does not apply where the causes of action are factually dissimilar, Friedman v. Park Lane Motors, Inc., 18 AD2d 262 (1st Dept. 1963), meaning that the evidence necessary for the requested relief varies materially between the two cases. Melillio v. County of Nassau, 307 AD2d 356, 358 (2d Dept. 2003). Here, it is clear that the evidence necessary to establish that Duffy did not obtain proper fire insurance varies materially from the evidence necessary to establish that he improperly paid himself out of corporate funds.

That does not end the inquiry as there is still the matter of issue preclusion. Collateral estoppel precludes the relitigation of issues that are identical to ones necessarily decided in prior litigation and the litigant against whom preclusion is sought had a full and fair opportunity to litigate the issues in the prior case. See, e.g., Gilberg v. Barbieri, 53 NY2d 285 (1981); Sucher v. Kutcher's Country Club, 113 AD2d 928 (1985). It is the burden of the proponent of preclusion to show that an issue in the present case is identical to an issue in the previous case. Schwartz v. Public Administrator of Bronx County, 24 NY2d 65, 74 (1969); Sucher v. Kutcher's Country Club, supra . Here, Duffy has failed to carry this burden. There is absolutely no evidence that would show that any issue was decided in the New York County case that would have any bearing on the present one.

B. Statute of Limitations

In the answer, and in the trial memorandum, Defendants assert a defense [*21]of the statute of limitations. Duffy points out that the defalcations complained of occurred in 2000, that this action was brought in 2004, and that the statute of limitations on conversion claims is three years. Plaintiff's failure to bring the action within three years (despite being on notice of the misappropriation since November, 2000) is fatal to a conversion cause of action and Plaintiff cannot detour around the statute of limitations by labeling the claim a claim for breach of fiduciary duty or a claim for the imposition of a constructive trust. Gold Sun Shipping Ltd. v. Ionian Transport, Inc., 245 AD2d 420 (2d Dept. 1997). However, where, a complaint alleges facts which support causes of action alleging conversion and breach of an implied contract, the plaintiff may waive the conversion cause of action and proceed on a breach of an implied contract theory to which a six-year Statute of Limitations period is applicable. Id.

Here, 37 Park has pleaded and established an express contract and has also established the basis for an implied contract. Whether viewed as an express contract or as implied contract, the relationship between the parties has its genesis in contract and since only damages for injury to property are sought (and not damages for personal injuries), the six year statute applies to the contract claim. Hence, to that extent, the action is timely. See Novita LLC v. 307 West Restaurant Corp., 35 AD2d 234 (1st Dept. 2006); Baratta v. Kozlowski, 94 AD2d 454 (2d Dept. 1983); Rodriguez v. Central Parking System of New York, ___ Misc 3d ___, 2007 WL 3086747 (App. T. 2007).

AMENDMENT OF THE COMPLAINT

In its post-trial submission, Plaintiff asks, for the first time, for permission to deem the Complaint amended to assert a claim under Judiciary Law, §487 for treble damages, asserting that Duffy, as an attorney, wilfully received money which he did not lay out and for which he is answerable. This claim is rejected. First, this claim was not made prior to or during trial and Duffy had no ability to prepare for it. The Court notes that Duffy represented himself and, perhaps, if treble damages had been demanded, he may have opted to retain counsel and may have prepared for the case differently. Second, as above noted, Plaintiff's conversion claim is time-barred. While the Court is willing, as also above noted, to deem the complaint amended to include a cause of action in implied contract for money had and received, and to apply the contract period of limitations, it cannot permit Plaintiff to recover any damages other than those allowable for breach of contract. The Court notes that Plaintiff asserted that it did not bring the action sooner because it had complained to the Nassau County District Attorney and was awaiting action from that office. The Court finds that this is an insufficient excuse for failing to bring the action in a more timely way. If the Nassau County District Attorney had acted to prosecute Duffy, there would have been no assurance that Plaintiff would have received restitution as the result of the proceeding. Further, when the District Attorney did not act by the end of 2002, Plaintiff should have [*22]brought its action then.

PUNITIVE DAMAGES

Plaintiff also requests an award of punitive damages. The difficulty is that, while there is authority for awarding punitive damages where a corporate officer anddirector wrongfully diverts corporate assets, see Giblin v. Murphy, 73 NY2d 769 (1988). In Rocanova v. Equitable Life Assurance Society of the United States, 83 NY2d 603, 613 (1984), the Court of Appeals stated: Punitive damages are not recoverable for an ordinary breach of contract as their purpose is not to remedy private wrongs but to vindicate public rights... However, where the breach of contract also involves a fraud evincing a "high degree of moral turpitude" and demonstrating "such wanton dishonesty as to imply a criminal indifference to civil obligations", punitive damages are recoverable if the conduct was "aimed at the public generally".... Punitive damages are available where the conduct constituting, accompanying, or associated with the breach of contract is first actionable as an independent tort for which compensatory damages are ordinarily available, and is sufficiently egregious ... to warrant the additional imposition of exemplary damages. (citations and some language omitted).

While the conduct engaged in by Duffy would be actionable in tort as conversion, the statute of limitations has run on that claim. Since Plaintiff is barred from collecting compensatory damages for conversion, Plaintiff cannot collect punitive damages either. Additionally, there is no showing that the conduct was aimed at the public generally.

The Court is troubled by the conduct at issue, particularly since Duffy's conduct as a fiduciary has previously been found wanting. See Matter of Dwyer, N.Y.L.J., December 20, 1989 (Surr. Ct. NY County). The Court will, therefore, forward a copy of this Decision and Order to the Grievance Committee for the Tenth Judicial District for such action, if any, that the Committee may deem appropriate. The Court believes that Plaintiff will be made sufficiently whole by an award of compensatory damages with interest. Whether Duffy should be punished or disciplined for any misconduct is best addressed through the disciplinary process, and not by an award of punitive damages.

INTEREST [*23]

As Plaintiff's recovery is in contract, Plaintiff is entitled to interest. CPLR 5001 (a). Since the withdrawals occurred in the period from March 2000 to September 2000, the Court will use July 1, 2000 as a reasonable interest mid-point. See CPLR 5001(b).

CONCLUSION

Accordingly, for the reasons stated, the Court will grant judgment to Plaintiff against both Defendants in the principal sum of $137,853, together with interest thereon from July 1, 2000, with the actual amount of interest to be computed by the Clerk at the time of entry of judgment, together with allowable costs and taxable disbursements in accordance with law.

For the foregoing reasons, it is hereby

ORDERED that Plaintiff has prevailed on its claims against Defendants to the extent hereinbefore and hereinafter set forth; and it is further

ORDERED that, except as otherwise indicated, all applications for relief made by any party are denied; and it is further

ORDERED that Plaintiff shall, pursuant to the provisions of 22 N.Y.C.R.R. §202.48, submit a proposed judgment in accordance herewith, on notice to Defendants, on December 14, 2007; and it further

ORDERED that counsel for Plaintiff shall, on or before December 21, 2007, retrieve from the Court all trial exhibits and shall retain them pending notification from Defendants as to whether an appeal will be pursued.

The foregoing constitutes the Decision and Order of this Court.

Dated:White Plains, New York

December 4, 2007

E N T E R : [*24]

________________________________

Alan D. Scheinkman

Justice of the Supreme Court Footnotes

Footnote 1:At the time of the events, Sidor was known as Cindy M. Cocilovo. She became married prior to her deposition and was known at that time as Sidor. The Court will refer to her by her post-marriage name.

Footnote 2:In the course of eliciting this agreement, the Court referred to the specific amount identified in the Complaint and thereafter the Court and the parties referred to the amount as $137,000, using the approximation. However, it is clear that the agreement was to the specific amount alleged in the Complaint and the Court will use the more precise figure.

Footnote 3:While the name of the firm is Berg & Duffy, LLP, Duffy testified, without contradiction, that Mr. Berg had passed away prior to the events in question. There is no evidence that any one other than Duffy has an interest in the law firm.

Footnote 4:The documents annexed to the Lind transcript indicate that Leonard A. Weiss, Esq. of Martino & Weiss was the attorney who handled the closing for 37 Park. Since Berg and Duffy's bills were paid, and Plaintiff has not made any issue of them, the Court will not speculate as to whether any services rendered by Mr. Duffy were duplicative of those rendered by Mr. Weiss.

Footnote 5:Nissman's testimony was inconsequential as he had no information relevant to whether Duffy was entitled to commissions. Sidor testified at her deposition that she had a personal relationship with Nissman. However, there is no indication that Nissman's company was hired because of any relationship that he had with Sidor or that any such relationship had any bearing on any of the matters at issue here.

Footnote 6:Sidor testified that Duffy's signature was affixed by use of a signature stamp. However, Sidor testified that she only used the stamp when authorized to do so by Duffy.

Footnote 7:This signature, too, was affixed with the use of the stamp.

Footnote 8:Though the quoted language would suggest that Duffy had a direct communication with Shamis prior to the exchange of correspondence in November, 2000, neither Duffy nor Shamis testified to any such dialogue.

Footnote 9:Plaintiff's own complaint alleges that Shamis could not (at least in 1999) personally handle Plaintiff's funds or pay its bills without incurring significant tax liability for the trust. Whether this impediment was eliminated later on is not known. The Court is not presently asked to deal with any tax issues arising from Shamis' conduct; this is mentioned to point out that Duffy was attempting to get at a potential sore point — and the tax liabilities could possibly be more of an economic issue than the loss of approximately $137,000.

Footnote 10:The Court does not credit so much of Shamis' testimony as contended that he believed that bill paying services would be rendered gratis. Whatever the practice may be in Hong Kong, Shamis, as an experienced international businessman knew, in New York, not to expect something for nothing. While it is certainly plausible that an attorney might provide such services as an accommodation to a substantial, on-going client, it defies ordinary experience that a wealthy individual would expect a New York attorney to handle a client's personal affairs without any quid pro quo. Indeed, Duffy's bills for such services were paid without question, showing that Shamis did, directly or indirectly, pay for Duffy's services. But the fact that Duffy was paid for these services on as-billed basis contradicts, rather than supports, Duffy's claim to a generic 5% commission for these services.