Resheff, Inc. v 970 Kent Ave. Assoc., LLC

[*1] Resheff, Inc. v 970 Kent Ave. Assoc., LLC 2009 NY Slip Op 50116(U) [22 Misc 3d 1114(A)] Decided on January 26, 2009 Supreme Court, Kings County Demarest, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 January 26, 2009
Supreme Court, Kings County

Resheff, Inc. and Resheff, Inc. on behalf of all persons and entities entitled to share in the funds received by, defendants herein in connection with a private improvement located at 970 Kent Avenue Brooklyn, NY,, Plaintiff,

against

970 Kent Avenue Associates, LLC, et al., Defendants.



40337/07



Attorney for Plaintiff:

Jason Lange, Esq.

TORRE, LENTZ, GAMELL GARY & RITTMASTER, LLP

100 JERICHO QUADRANGLE STE 309

JERICHO, NY 11753-2702

Attorney for Defendants

970 KENT AVE. ASSOCIATES LLC;

CPC OPPORTUNITY FUND LLC; CPC RESOURCES INC and

JI CONSTRUCTION OF BROOKLYN LLC:

Barry Margolis, Esq.

ABRAMS GARFINKEL MARGOLIS BERGSON LLP

237 W 35TH ST FL 4TH

NEW YORK, NY 10001-1905

Attorney for Defendants GEORGE DELLAPA and

SYCAMORE KENT DEVELOPMENT GROUP LLC:

Melvin Hershowitz, Esq. MELVIN HIRSHOWITZ ATTORNEY

630 3RD AVE FL 18

NEW YORK, NY 10017-6705

Carolyn E. Demarest, J.

This action arises out of a contract dispute relating to the construction of a residential apartment building located at 970 Kent Avenue, Brooklyn, New York. 970 Kent Associates, LLC (Kent) is the owner and plaintiff Resheff, Inc. (Resheff) was the general contractor on the project which was terminated in September 2004 prior to the project's completion.[FN1] This action was commenced with the filing of a Summons with Notice on October 30, 2007. Resheff alleges nineteen causes of action in the amended complaint against the property owner, developers, lenders, subsequent contractors, architect and unit owners, though not all causes of action are alleged against every defendant.[FN2] Plaintiff has dismissed the action without prejudice against the individual unit owners.

Defendants Kent, its constituent members, CPC Resources, Inc.(CPCR), CPCR Opportunity Fund, LLC (Opportunity), and JI Construction of Brooklyn, LLC (JI), the general contractor which succeeded Resheff, have moved (i) pursuant to CPLR 3211(a)(1) and CPLR 3211(a)(5) to dismiss plaintiff's sixteenth cause of action as against JI on the basis of documentary evidence and the expiration of the statute limitations; (ii) pursuant to CPLR 3211(a)(5), to dismiss the fourth cause of action as against all movants and the seventeenth and eighteenth causes of action as against CPCR and JI due to the expiration of the statute of limitations; and (iii) pursuant to CPLR 3211(a)(7), to dismiss plaintiff's seventh, tenth, eleventh, twelfth, thirteenth and fifteenth causes of action as variously interposed against movants. CPCR and Opportunity also move, pursuant to CPLR 3211(a)(7) and New York Limited Liability Company Law (LLCL) § 609, to dismiss plaintiff's first, second, third, fourth, fifth, sixth, eleventh, twelfth, thirteenth, seventeenth and eighteenth causes of action as alleged against them [*2]based upon lack of privity with plaintiff and the absence of a legal basis for their alleged liability for the acts of Kent.

Separately, defendants George Dellapa (Dellapa) and Sycamore Kent Development Group, LLC (Sycamore) move, (i) pursuant to CPLR 3211(a)(7), to dismiss every cause asserted against them for failure to state a cause of action and, alternatively, (ii) pursuant to CPLR 3211(a)(5), to dismiss the fourth, sixteenth, seventeenth, eighteenth and nineteenth causes of action as against Dellapa and Sycamore upon the grounds that each cause of action is barred by the statute of limitations and that the fourteenth and fifteenth causes of action are barred by the statute of frauds.

In response to defendants' motions, plaintiff has voluntarily withdrawn, without prejudice, its seventh, twelfth and thirteenth causes of action against Kent; its first through sixth, eleventh, twelfth, thirteenth, seventeenth and eighteenth causes of action as against CPCR and Opportunity; its tenth, twelfth, thirteenth, seventeenth and eighteenth causes of action against JI; its fourth, thirteenth, fourteenth, seventeenth, eighteenth and nineteenth causes of action against Dellapa; and its fourth, eighth, twelfth, thirteenth, fourteenth, seventeenth, eighteenth and nineteenth causes of action against Sycamore. Thus, only the fifteenth and sixteenth causes of action in the amended complaint remain against Dellapa and Sycamore. Therefore, remaining for consideration on the pending motions are Kent's and JI's CPLR 3211(a)(5) motion to dismiss the fourth cause of action on statute of limitations grounds and JI's, Dellapa's and Sycamore's motion to dismiss the fifteenth and sixteenth causes of action.[FN3] For the reasons set forth below, defendants' motions to dismiss the fourth, fifteenth and sixteenth causes of action are granted.

Facts

On April 16, 2003, Kent entered into a contract with Resheff (the "Agreement") to construct a residential apartment building and complex located at 970 Kent Avenue, Brooklyn, New York for $12,500,000 (the "Project").[FN4] Plaintiff alleges that during the "early Fall of 2004," Resheff was terminated by Kent and JI was hired to complete the Project. A Certificate of Occupancy was issued on May 11, 2006. Thereafter, numerous condominium units were sold to the individually named defendants.

Plaintiff alleges that a number of the defendants are members of or have ownership interests in other defendants. Specifically, plaintiff alleges that defendants CPC Resources, Inc., CPCR Opportunity Fund, LLC, which are alleged to be the members of CPC Opportunity Fund, LLC, and CPC Opportunity Fund, LLC (identified collectively in the complaint as CPCR), and Sycamore have ownership interests in, or were members of, Kent. Plaintiff also alleges that the defendant architect on the project, Winzelberg, as a member of co-defendant Winzelberg PC (hereinafter referred to collectively as "Winzelberg"),[FN5] had an ownership interest in Sycamore, as did defendant Dellapa. Plaintiff further alleges that its successor as general contractor on the Project, defendant JI, was owned and controlled by defendants Winzelberg, Dellapa and/or Sycamore and operated out of the home of defendant Dellapa and/or the offices of defendant [*3]CPCR.[FN6] Plaintiff alleges that all of the moving defendants communicated with it, apparently on behalf of Kent, regarding performance of the Agreement, both before and after its execution, and are therefore liable for plaintiff's damages.

Plaintiff's fifteenth cause of action is for fraud/fraudulent inducement. Plaintiff claims that Kent and CPCR were obligated under the Project Agreement to direct Resheff on project tasks as well as provide it with architectural, engineering, and administrative documents ("Contract Documents") to facilitate the Project's completion. Plaintiff alleges that, throughout the duration of the project, Sycamore, Winzelberg and Dellapa made various promises to Resheff relating to compensation and directed Resheff to perform work outside the scope of the Agreement without compensation. Plaintiff also alleges that the defendants issued erroneous, inaccurate or incomplete Contract Documents and refused to approve change orders. In addition, Resheff claims that on March 4, 2004 the defendants "forged Resheff's signature and/or had their signature forged on a amendment of contract' form" (Complaint ¶ 272).[FN7]

Plaintiff's sixteenth cause of action alleges that JI, Winzelberg, Dellapa and Sycamore tortiously interfered with Resheff's contract with Kent by falsely and erroneously advising Kent and CPCR that Resheff was delaying the Project and causing defective work to be performed on the Project. Plaintiff claims that Winzelberg, Dellapa and Sycamore issued erroneous information to plaintiff which delayed its work on the Project thereby inducing Kent to terminate Resheff and hire JI, an entity which plaintiff alleges was owned by Winzelberg, Dellapa and Sycamore.

Plaintiff's fourth cause of action is for "Article 3-A Trust Fund Violations" under New York Lien Law. Plaintiff alleges that, in the Spring of 2003, Kent and CPCR received a loan in the amount of $13,780,000 from defendant HSBC Bank USA, N.A. (HSBC) as funding for the Project. Upon the Project's completion, Kent also is alleged to have profited from the sale of the 970 Kent condominium units. It is alleged that the loan and sale funds constituted assets of a New York State Lien Law Article 3-A trust. Plaintiff asserts that Kent, CPCR, Winzelberg, Dellapa and Sycamore violated Article 3-A because they did not use the trust funds to pay the contractors and materialmen that worked on the Project, but rather, diverted those assets to pay other debts.

Discussion

Defendants move pursuant to CPLR 3211(a)(1),(5) and (7). On a motion to dismiss pursuant to CPLR 3211(a)(7), the court must accept the facts alleged by the plaintiff as true and liberally construe the complaint, according it the benefit of every possible favorable inference. (Campaign for Fiscal Equity, Inc. v State of New York, 86 NY2d [*4]307, 318 [1995]; see also Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414 [2001]). The role of the court is to "determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87 [1994]). On a CPLR 3211(a)(5) motion, the court must also take the allegations in the complaint as true and the burden is on the defendant to establish that the limitations period to sue has expired (Swift v New York Medical College, 25 AD3d 686, 687 [2d Dept 2006]; see also Island ADC, Inc. v Baldassano Architectural Group, PC, 49 AD3d 815, 816 [2d Dept 2008]). "Under CPLR 3211(a)(1), dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (Leon, 84 NY2d at 87).

The Fourth Cause of Action: New York Lien Law Article 3-A

Plaintiff claims that the loan Kent received for the 970 Kent Project, as well as the funds received from the sale of the 970 Kent units, constitute Lien Law Article 3-A trust funds to be applied to the payment of claims of Resheff and all other contractors and suppliers that worked on the Project. New York State Lien Law provides that "funds . . . received by an owner under or in connection with a contract for . . . an improvement of real property. . . and any right of action for any such funds due or earned or to become due or earned, shall constitute assets of a trust" (Lien Law § 70 [1]). Under Lien Law § 70(5)(a), the proceeds from a building loan that are received by the owner of a construction project constitute trust funds for the benefit of contractors, subcontractors, materialmen and laborers for claims arising from improvements to the project. "With respect to the trust of which an owner is a trustee, trust claims' means claims of contractors, subcontractors, architects, engineers, surveyors, laborers and materialmen arising out of the cost of the improvement, for which the owner is obligated, and also means any obligation of the owner incurred in connection with the improvement for a payment or expenditure " (Lien Law § 71[2]). Beneficiaries are those persons having claims for payments for which the trustee is authorized to use trust assets. (Lien Law § 72[4]). Lien Law § 77 allows any holder of a trust claim to bring an action to enforce a trust in a representative capacity (Lien Law § 77[1]). However, Lien Law § 77(2) provides, in relevant part: "No such action shall be maintainable if commenced more than one year after the completion of such

improvement . . ."

Defendants argue that the one-year limitations period expired prior to commencement of this action. It is not disputed that the Certificate of Occupancy for the Project was issued on May 11, 2006 (Exhibits "C" and "D" to the Affirmation in Support of Motion to Dismiss made by Defendants Dellapa and Sycamore Kent). Plaintiff does not contest that the date of issuance of the Certificate of Occupancy is the final date of the [*5]Project's completion. An Article 3-A claim by a contractor beneficiary accrues upon the completion of the project. (Losco Group v Yonkers Residential Center, Inc., 276 AD2d 532 [2d Dept 2000]; see also AD Walker & Co. v Shelter Programs Co, 84 AD2d 536 [2d Dept 1981]). It is undisputed that Resheff was initially the general contractor on the Project and that this action was not commenced until October 30, 2007, more than one year after the date the Project was completed.

Plaintiff argues, however, that the one year statute of limitations set forth in Lien Law § 77 is not applicable to bar suit when a project is "abandoned," reasoning that Kent's termination of Resheff constituted an "abandonment" of Resheff so as to require the application of a six-year limitations period under CPLR 213, citing Putnins Contracting Corp v Winston Woods at Dix Hills, Inc., 72 Misc 2d 987 (Sup Ct Nassau Co 1973), aff'd 43 AD2d 667 (2d Dept 1973), aff'd 36 NY2d 679 (1975). This Court rejects plaintiff's contrived analysis. In Putnins, the construction project was abandoned by the developer and never completed. The court denied defendants' motion to dismiss based upon the one-year statute of limitations, noting that the plain language of the statute measured the time period only from completion, without reference to "abandonment," and reasoning that since abandonment is an ephemeral act, with an offended party having no visible beginning observation point, the general rule should not admit of the one-year cutoff applicable to completions, which after all, are much more readily observable or ascertainable. (72 Misc 2d at 988).

In affirming, the Court of Appeals stated: [W]e, too, conclude that the one-year Statute of Limitations of subdivision 2 of section 77 is not applicable where there is abandonment rather than completion of the improvement. We note the difference in diction between subdivisions 4 and 5 of that section in which provision is made for both completion or abandonment' and subdivision 2 in which reference is to completion' only. We observe, too, that in a practical sense there is a real distinction between completion of an improvement (where the focus of attention is a single stage of progress) and abandonment (where the focus may well be diffused in the light of possibility that construction may have been or may be resumed); the element of finality which characterizes completion is not necessarily to be found in activities believed by one party or another to constitute abandonment. (36 NY2d at 680).

Application of the one-year statutory period here is completely consistent with the logic of Putnins, as we are not dealing with the abandonment of a project, but rather, completion thereof. In this case, Resheff was terminated (not "abandoned") and another contractor, JI, saw the Project through to completion. There is no dispute that issuance of the certificate of occupancy on May 11, 2006, established a finite date of completion for [*6]purposes of Lien Law § 77. Unlike the abandonment scenario in Putnins in which no date could be ascertained for "completion of such improvement,"the limitations period here can clearly be measured from a well-defined completion date. (See Losco Group, 276 AD2d at 532; see also A.D. Walker & Co., Inc. v Shelter Programs Co., 84 AD2d 536 [2d Dept 1981]).

Similarly, this Court rejects plaintiff's alternative argument premised on a single statement in In re Valerino Construction, Inc., 250 BR 39, 44 (WDNY 2000), suggesting that a cause of action to enforce a trust does not accrue until all trust fund beneficiaries are paid, contending that discovery is therefore necessary to determine the viability of plaintiff's Article 3-A cause of action. In Valerino, the court stated that "the Lien Law and case law is clear that until all trust fund beneficiaries are paid in full, the trust continues even in diverted funds and it remains intact regardless of the applicable statute of limitations." Apart from the inapposite facts of Valerino, a bankruptcy action in which the trustee was seeking to recover funds preferentially transferred as part of a Lien Law Trust, the case merely reiterates the holding in Putnins with respect to abandonment and in no way enlarges plaintiff's time to seek enforcement of its rights as a trust beneficiary.

Although it is well-settled that an Article 3-A trust arises from the making of the contract, even before a claim exists, and continues to exist until all trust claims have been paid or discharged (Matter of RLI Insurance Company v New York State Department of Labor, 97 NY2d 256, 262-63 [2002]; Lien Law 70[3]), the statute of limitations contained in section 77 remains as a procedural cut off particular to a beneficiary's right to maintain the action (see Flintkote Co. v United States, 477 FRD 322, 326[SDNY 1989]; see also Davis and Warshow, Inc. V S. Iser, Inc., 30 Misc 2d 528, 538-40 [Sup Ct NY Co 1961]; cf. Valerino, 250 BR at 45). A finding that Resheff is barred by the statutory period from litigating its claim is not synonymous with a finding that the trust has ceased to exist. As a general contractor, Resheff was required to bring its action within one year of the Project's completion, but failed to do so. Its fourth cause of action is dismissed as time-barred.

The Fifteenth Cause of Action for Fraudulent Inducement/Fraud

The elements required to sustain a cause of action for fraud are "a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury" (Orlando v Kukielka, 40 AD3d 829, 831 [2d Dept 2007]). CPLR 3016(b) requires that these elements be pled with particularity (CPLR 3016[b]; Fink v Citizens Mtge. Banking, 148 AD2d 578 [2d Dept 1989]). Conclusory allegations are insufficient to sustain a cause of action for fraud (See Fink, 148 AD2d at 578).

JI moves to dismiss the fifteenth cause of action for fraud because Resheff fails to plead any facts against JI in support of such claim and, therefore, does not allege a prima facie case for fraud against JI or meet the pleading requirements for fraud set forth in CPLR 3016(b). A review of the allegations contained in the fifteenth cause of action reveals no specific fraud allegations against JI, nor does plaintiff describe any specific acts by JI in its opposition to JI's motion to dismiss. The ambiguous assertion that "defendants forged Resheff's signature and/or had their [*7]signature forged on a amendment of contract' form" (Complaint ¶ 272) is insufficient to satisfy the requirements of CPLR 3016(b). Therefore, the cause of action as against JI is dismissed. (See generally Lanzi v Brooks, 54 AD2d 1057, 1058 [3d Dept 1976], aff d 43 NY2d 778 [1977], and Fink, 148 AD2d at 578).

Defendants Dellapa and Sycamore separately argue that plaintiff fails to state a cause of action for fraud against them. They claim that plaintiff's fraud allegations relate solely to its breach of contract claims and, therefore, must be dismissed as duplicative. Indeed, "[i]t is well settled that a cause of action seeking damages for fraud cannot be sustained when the only fraud charged relates to a breach of contract" (Elsky v KM Ins. Brokers, 139 AD2d 691 [2d Dept 1988]; see also Tiffany at Westbury Condominium v Marelli Dev. Corp., 40 AD3d 1073, 1076 [2d Dept 2007]; 34-35th Corp. v 1-10 Indus. Assoc., 2 AD3d 711, 712 [2003]). Moreover, a fraud claim must be dismissed unless it arises from representations that are collateral or extraneous to the parties contract (see 34-35th Corp., 2 AD3d at 712; Tsilogiannis v 53-11 90th St. Assoc., 293 AD2d 468, 469 [2d Dept 2002]; Alamo Contract Bldrs. v CTF Hotel Co., 242 AD2d 643 [2d Dept 1997]).

Plaintiff's fifteenth cause of action alleges that Dellapa and Sycamore made various promises to Resheff relating to compensation and work performed as extras under the contract and that Resheff was issued erroneous Contract Documents and directions by Dellapa and Sycamore. Such claims are the substance of a breach of contract cause of action as they relate entirely to obligations under the Project Agreement. In fact, plaintiff admits that accurate direction and Contract Documents were obligations specifically enumerated in the Project Agreement. Moreover, the fraud allegations against Sycamore and Dellapa are identical to the allegations against them contained in the fourteenth cause of action for breach of contract, which has been withdrawn, and in plaintiff's second cause of action for breach of contract against CPCR and Kent, which has been withdrawn as to CPCR.

The sole basis for the claims of a contractual breach by Dellapa and Sycamore, as alleged in the Complaint, is Sycamore's status as a member of Kent (Complaint ¶ 15) and Dellapa's status as a member of Sycamore (Complaint ¶ 18). See also, Complaint ¶ 260 in which plaintiff alleges that its communications with Sycamore regarding the performance of the contract "created the functional equivalent of a contract between Sycamore and Resheff". However, LLCL § 609(a) expressly provides:

Neither a member of a limited liability company, a manager of a limited liability company . . . nor an agent of a limited liability company (including a person having more than one such capacity) is liable for any debts, obligations or liabilities of the limited liability company or each other, whether arising in tort, contract or otherwise, solely by reason of being such member, manager or agent or acting . . . in such capacities or participating . . . in the conduct of the business of the limited liability company.

Section 610 of the LLCL further provides: "A member of a limited liability company is not a proper party to proceedings by or against a limited liability company, except where the object is to enforce a member's right against or liability to the limited liability company."

As the only allegations in the fifteenth cause of action sound in breach of contract, notwithstanding its denomination as a claim for "fraudulent inducement/fraud," while plaintiff may have a viable claim for breach of contract against Kent, the allegations fail to state a cause of [*8]action against Sycamore and Dellapa who were merely performing the business of Kent. This applies as well to any alleged forgery of plaintiff's signature on an amendment to the Agreement as Kent was the contracting party. There are no allegations of fraud independent of the performance of the terms of the contract.[FN8] The fifteenth cause of action is dismissed.[FN9]

Sixteenth Cause of Action: Tortious Interference with Contract

Plaintiff's sixteenth cause of action for tortious interference with contract relies on allegations that Sycamore and Dellapa, despite their knowledge to the contrary, "erroneously and continually advised Kent and CPCR that . . . Resheff was delaying the Project and causing defective work to be performed at the Project . . . in order to cause Resheff to be improperly barred from performing its work . . . and [to be] replaced by a contractor [JI] with significant ties to Sycamore . . . and Dellapa" (Complaint ¶¶ 281-282), and that "JI [falsely] advised Kent and CPCR that . . . Resheff had delayed the Project and caused defective work to be performed" (Complaint ¶ 285). Thus, plaintiff unequivocally alleges that JI, Dellapa and Sycamore induced Kent and CPCR to breach their contract with Resheff so that Kent would hire JI, an entity that was allegedly created by Sycamore, Dellapa and Winzelberg.

As plaintiff acknowledges, it is well settled that a member of a limited liability company is statutorily exempt from individual liability for acts taken on behalf of the company (LLCL § 609; see also Retropolis Inc. v 14th Street Development, 17 AD3d 209, 210 [2005]). However, this rule applies only where an officer or member acted in good faith (see First Bank of Americas v Motor Car Funding, 257 AD2d 287, 294 [1st Dept 1999]). In situations where a member acted in his or her personal interest, rather than the interests of the company, or where it is alleged that the acts "were calculated to impair the plaintiff's business for the personal profit of the defendant," an officer or member may be held personally liable for interference with contract (see Joan Hansen & Co., Inc. v Everlast World's Boxing Headquarters Corp., 296 AD2d 103, 109-110 [1st Dept 2002]; see also Rothstein v Equity Ventures, LLC., 299 AD2d 472, 474 [2d Dept 2002]["[M]embers of limited liability companies . . . may be held personally liable if they participate in the commission of a tort in furtherance of company business"]; Bib Construction Co., Inc., v City of Poughkeepsie, 273 AD2d 186, 187 [2d Dept 2000]). Indeed, the suggestion, [*9]that JI, Dellapa and Sycamore induced the breach in order to profit from JI's appointment, is the gravaman of plaintiff's sixteenth cause of action. Reading the complaint broadly, the Court finds that plaintiff has sufficiently alleged that Dellapa and Sycamore may have been acting with motives other than to benefit Kent sufficient to render them liable for tortious interference with contract. (See Joan Hansen & Co., Inc. 296 AD2d at 109-110).

However, defendants move to dismiss the sixteenth cause of action pursuant to CPLR 3211(a)(5) on the basis that it is barred by the three year statute of limitations set forth in CPLR 214(4). Plaintiff acknowledges that the three year period is applicable. In its original verified complaint plaintiff alleged that it was terminated from the Project in September 2004 (Exhibit F to the Hirshowitz Affidavit in Support of the Dellapa and Sycamore Motion to Dismiss, ¶¶ 54 and 156). But, in its amended complaint plaintiff now states that it was terminated in the "early Fall of 2004" and that the damages resulting from the unjust termination, for which defendants are alleged to be liable under the sixteenth cause of action, were incurred "in or about late Fall of 2004" (Complaint ¶ 290).

It is well-settled that a claim for tortious interference with contract in the circumstances at bar accrues upon the termination date (see Edward B. Fitzpatrick, Jr. Constr. Corp. v County of Suffolk, 138 AD2d 446, 449 [2d Dept 1988]; Kartiganer Assoc. P.C. v Town of New Windsor, 108 AD2d 898, 899 [2d Dept 1985]), which defendants claim to be September 2004, the date alleged in the original complaint. Defendants argue that the changed termination date is a "transparent and frivolous" attempt to escape the bar of the statute of limitations and ask the Court to disregard the "Fall 2004" allegation and apply the September 2004 date, further asserting that plaintiff should be judicially estopped from relying on its more ambiguous pleading of "early Fall of 2004," as opposed to its earlier pleading of "September 2004." This argument is rejected as plaintiff amended its complaint as a matter of right prior to joinder of issue. Such amendments are often made to correct an error in an earlier pleading. This Court is bound to treat the Amended Complaint as the controlling pleading in the case.

However, contrary to its argument in its Memorandum of Law that the Court should deny defendants' motions because "the date as to which Resheff was terminated and suffered injuries as a result of the tortious actions of Sycamore, Dellapa and/or JI remains a question of fact, the answers to which are not squarely in Resheff's possession" (Plaintiff Memorandum of Law at 8), at oral argument plaintiff acknowledged that it was terminated in September 2004. Accordingly, the sixteenth cause of action must be dismissed.

Dellapa and Sycamore also request, in their Reply Affirmation, that the Court sanction plaintiff for the "frivolous change" of Resheff's alleged termination date in the complaint. Pursuant to 22 NYCRR §130-1.1, a court may award sanctions, in its discretion, for actual expenses reasonably incurred and reasonable attorney's fees resulting from frivolous conduct, which includes the assertion of false factual statements. In the circumstances, the Court declines to impose such sanctions. Although plaintiff did seek to create an issue of fact which it subsequently acknowledged was not in dispute, defendants failed to offer any evidence of the actual termination date in support of its motion, but relied exclusively on the superceded complaint and an earlier affirmation of counsel. Thus, but for plaintiff's ultimate acknowledgment of the termination date, defendants failed to meet their burden on the CPLR 3211(a)(5) motion. See Swift, 25 AD3d at 687.

[*10]Conclusion

The fourth cause of action is dismissed against Kent and JI. Plaintiff's fifteenth and sixteenth causes of action against JI, Dellapa and Sycamore are also dismissed. All causes of action asserted against CPC Opportunity Fund, LLC, CPC Resources, Inc. d/b/a CPC Opportunity Fund LLC and CPCR Opportunity Fund LLC d/b/a CPC Opportunity Fund, LLC, sued herein collectively as CPCR and/or Opportunity, have been withdrawn; thus, the complaint is dismissed, as against those defendants. Similarly, all other causes of action against JI, Dellapa and Sycamore have been withdrawn; therefore, the complaint is dismissed as to those parties as well. Kent is directed to serve and file its answer within 20 days of this decision. A preliminary conference will be held on February 18, 2008 at 2:30 pm.

The foregoing constitutes the decision and Order of the Court.

E N T E R

__________________

J. S. C. Footnotes

Footnote 1:Although much is made in the briefs regarding plaintiff's modification of the alleged date of termination from "September 2004" in the original Complaint to "early Fall of 2004" in the Amended Complaint, at oral argument, it was agreed that Resheff was terminated in September 2004.

Footnote 2:The first cause of action for wrongful termination is alleged against Kent and CPCR, its constituent member. Resheff has withdrawn this cause of action against CPCR. The second cause of action sounds in breach of contract against Kent, CPCR and Opportunity, another member, and has also been withdrawn against CPCR and Opportunity. The fifth and sixth causes of action for quantum meruit and unjust enrichment are also withdrawn against all defendants except Kent. Plaintiff's third cause of action is to foreclose on the bond filed by Kent but has been withdrawn as against CPCR and Opportunity and is currently not subject to Kent's motion to dismiss. The seventh through eleventh causes of action, which allege that Resheff is "entitled to a Court Order setting aside and annulling" the various alleged fraudulent conveyances of assets among the various defendants, are no longer relevant to this motion because they have been withdrawn as against all moving defendants. The twelfth cause of action asks the court to appoint a receiver for the 970 Kent property but has been withdrawn against all moving defendants. Similarly, the thirteenth cause of action which requests attorneys fees has been withdrawn against all moving defendants. The fourteenth cause of action alleges breach of contract against Sycamore, Winzelberg and Dellapa but has been withdrawn against movants Dellapa and Sycamore. The seventeenth cause of action alleges interference with prospective economic advantage against Sycamore, Winzelberg, Dellapa and JI but has been withdrawn as against the moving defendants. The eighteenth cause of action for defamation and the nineteenth cause of action for negligence have been withdrawn against the moving defendants.

Footnote 3:The fifteenth and sixteenth causes of action are not asserted against Kent, CPCR or Opportunity.

Footnote 4:The Agreement was signed on behalf of 970 Kent by defendant member CPCR.

Footnote 5:Winzelberg and Winzelberg PC are not party to the instant motions to dismiss.

Footnote 6:Plaintiff claims that these defendants conveyed assets among themselves without fair consideration in an effort to defraud or prevent contractors, including Resheff, from recovering money allegedly owed for work performed on the Project, thereby alleging the predicate for plaintiff's seventh through eleventh causes of action which have been discontinued. It is noted that plaintiff's claim has been bonded by Kent so as to obtain vacatur of plaintiff's lien, thus rendering moot the claims for fraudulent conveyance.

Footnote 7:The "Amendment of Contract" form dated March 4, 2004, attached to the plaintiff's affidavit in opposition to the motions to dismiss, provides that, upon written request, Kent would advance funds to Resheff for work and materials to facilitate timely completion of the Project.

Footnote 8:Plaintiff fails to show how the allegedly forged amendment caused it an injury peculiar to the alleged fraud, different than the injuries suffered as a result of the defendants' alleged breach of contract. (See 34-35th Corp., 2 AD3d at 712).

Footnote 9:The Court notes that defendants Dellapa and Sycamore also move to dismiss the fifteenth cause of action pursuant to CPLR 3211(a)(5). They argue that the fifteenth cause of action is also barred by the statute of frauds because the allegations relating to alleged promises made to Resheff by Dellapa and Sycamore are nothing more than attempts to make Dellapa and Sycamore guarantors of the Agreement between Resheff and Kent. Indeed, the allegations of various "promises" all relate to plaintiff's breach of contract claims and, therefore, do not alter the Court's holding that the fifteenth cause of action must be dismissed. Moreover, to the extent that the allegations contained in the fifteenth cause of action are also an attempt to make Dellapa and Sycamore guarantors of Kent's obligations under the Agreement, the cause of action would also be barred by the statute of frauds because there is no evidence of a separate writing between Dellapa, Sycamore and Resheff guaranteeing the Agreement which is solely between Kent and Resheff (See General Obligations Law § 5-701[a][2]; see also Bronx Store Equipment Co., Inc. v Westbury Brooklyn Assoc., L.P., 280 AD2d 352, 352-353 [1st Dept 2001]).