Selch v Selch
Annotate this Case
Download PDF
Selch v Selch 2011 NY Slip Op 32172(U) August 3, 2011 Sup Ct, NY County Docket Number: 106072/2010 Judge: Wooten Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. SCANNED ON 81812011 [* 1] $UPREME COURT OF THE STATE OF NEW YORK - NEW YORK GOUNTY PRESENT: P A R T , ,7 HON. PAUL WOOTEN Justice PATRICIA BAKWIN SELCH, - against- 106072l201O INDEK NO. Plaintlff, MOTION DATE agl MOTION SEQi NO, GREGORY STEPHEN SELCH and MELISSA JO PLEMIING, MOTIQNCAL. NO. , I , Defendants. Thq fpllowlng papem, numbered I to 6, were read on thls motion to dlsmlss by defendant Mellssa Jo Fiemlng, pumpant to CPLR 3211(q)(l) and (7). p4PEl33 NUMBERED Notiue of Motion/ Order to Show Cause -Affidavits - Exhibits ... I ,2 Answwlng Affldqvits - Exhibits (Memo) 3 ,a Replying Affidavits (Reply Memo) 5,6 Cross-Motion: OYes E NO Thio is an action in equity by plaintiff Patriciq Bakwin $elch ( plaintiff) against her son and daughter-in-law, defendants Gregory Stephen Gelch ( Mr. Selah ) and Melissa JOFlemirlg ( Fleping ) (qollectively defendants ), to Impose a constructiye tru$ aver any sUtplW monies I %I L E D qxecuted in conrlection with a line of credit that wag extended to;Mr. Selch ip 20Q proceeds of the line of credit were purportedly used for thge>(clusiUebenefit of both I(#M: - 8 2811 I defmdants, including for the purposes of paying expen6as telhfed to the cosl~a rthent. RlalOtiff Glaims that defendilnts will be unjustly defgndantg alloiyed to retain avy Gurplus monies without first r&im butsing plaihtiff foi hbr expenditures pursuant to the guaranty. Discovery has not cornmpncad and the Note of h u e Page 1 of 12 [* 2] has not been filed. Before the Court is Fleming's pre-ahswsr mqtion to dismim pursuant to CPLa 321 1(a)(l) and (7), seeking to dismiss the cgmplaint as against her qn the ground6 that: (I) cqmplaint fails to state a cause of action for a constructivg trust or unjust gnrichment the because it does not allege all of the essential elements pf such claims; and (2) there is a defense founded upon documentary evidence conclusively estqblishing that the line of credit I that plaintiff guaranteed was solely in Mr. Selch's ngme, and npt in Fleming's name. Plaintiff has rssponded in opposition to the motion, and Fleming has filed a reply. BACKGROUND A. Ths,Underlvinq Facts The relevant facts as alleged in the complalnt are 3s follows. Mr. Selch aqd Fleming were mgrried (211 September 23, 2000. They live apart and tWe'bersn involved in highly I conte8ted divqrge proceedimgB since 2007. Plaintiff ia W. Selch Mer, and Flsming's mothel'-ir)rlaw. In February 2096, defendants purchqsed, as husband and wife, a c4opsrdtive apartment located at 1160 Park Avenue, New York, New YOt+kL("t CP-w"), [he price of for , I $2,225,000.' They financed a portion of the purchase p Bank, N.A. ("the Bank), They allegedly $till needgd additibna1,finsnqingto pay'thh balance of , > $ L A a-op Ibah, pay monthly rndintenanca payments dcla to the cppp thsr household and living expenseg. To cover these sxp dbtained a line of credit from the Bank in the pritvipal su 1 thw renovations were cowpl&tc, ' lRff&hdHhts purchased ghareg of the co-op's corporatlon stock and thca tgnqks Itlteretst in the prqprldtary lease p4rtalnhg tp the to+op. Pnoe2of 12 [* 3] .with defendants children. Defendants were separated at the time and Mr. Selch had commenced divorce proceedings. Fleming continued to live in the co-op with the children and Mr. Selch resided at another location. In April 2008, the maturity date for the line of credit was extended. As further seaurity for the indebtedness, the Bank required plaintiff to execute a guarzrnty. Accordingly, on April 2, 20Q8, plgintiff executed and delivered to the B w k a Consumer Guaranty ( the Guarhnty ), pursuant to whioh plaintiff guaranteed the indebtednegq under the line of credit up to the principal amount Q $800,000, together with unpaid interest, collwtion costs, and attorney s f fees. The Ilne of credit was subsequently defaulted upon. The Bank [hen brought ah action for breach of contract against Mr. Selch in the Circuit Court of ( j w k County, Illinoi$, and on t 1 April 15, 2009, the oourt i s g p d a Final Judgment OrdQr Qn h s e n t ( the Consent Judgment ) in favor of the Bank and against Mr. Selch in the amount of $992,000. Defendants failed to pay any portian of the outstanding indebtedness underr the Cqhseht Judgment. The Bank thereafter smarlded payment lfrom plaintiff in the principal amaunt,qf $800,Q09ueder the Guaranty. I ( Qn Decgrnber 23, 20Q9, piaintlff entered into a setlli avoldGnce of a lawsuit:( the Settleirmnt Agreement ). UnEJq prdid the Bank the principal amount of $7QO,QOO, togetbar VJ 5 attdrtwy g fees of $1 1,3~1.07, full,,satisf+ctiangf plaintiff s obligations under thp Euararlty. PlairltifP alw paid an in additipnal $25,987.08 fgr legal fees in connection with 6 Plaintiff alleges that she has thus eypendeid a total of $73 I Guaranty and @ettlementAgt+eenlent,and thdt she may i I I legal fees. r , on Mqy 7, 2910, plaintiff cortimqmed the present first wuse of actien for P cgnatructive trust, she claims that ttpBank intends tb commence Page 3 of 12 I [* 4] foraclwure proceedings and that the co-op will be sald, dither by foreclosure or by defendants in co nhection with their pending divorce, and that defendants will be unjugtly enriched if they are allowed to retain any surplus monies realized from such sale without first relmburdng plaintiff fsr her expenditures under the Guaranty. Plaintiff seeks to impwe a constrclctlve trust, in her favor, over any surplus monies realized from a sale of the co-op up to the aggregate amount of She monies she has expended and will expend in cannectlon with thb Guaranty end Settlement Agreement. In the second cause of aqtion for unjust enrichment, plaintiff alternatively seeks mohey damages in the aggregate amgunt of the monies expended and to be expended in connection with the Quarmty and Settlement Agreement. Defendants have not ybt answered the cqmplainl. B, Flgrninq s MstiQnTo Diamiss In support of her dismlssal motion, Fleming submits, inter alia, a Consumer Pledge Agreemmt ( the Pledge Agreement ); a Promissory Note; correspondenpe between the Bapk qnd Mr. Selch; b a n billing statemenb; and the Copsent Judgmsrt2 Fleming alleges that her doc6mentary evidwce conclugivoly establishes that the line sf re was solely in Mr. Seleh s name, and not her name. The Pledge Agrperngnt i n d i q t w that It,was oxewtgd o pril 2, 2008 (the same dste aq, fhgl Gue ranty), betwraen Mr. Selch and the Bank in fhq y hate of SepteTber 21 2098, It was sigried only The Promissory Note was executbd by Mr. Salch ih favor of the Bank on September 21, Bank tg Mr. Selch; monthly statements Is8ued by the underlylng divorce, prgaeedisgs. Sinw thie evidence qongider It (see MoShln v Port Authorlty of New Yo&, Page 4 of 12 [* 5] The Promissory Note identifies the sole "Borrower" as Mr. Selch, and is signed solely by Mr. Selch. The Bank's loan billing statements were sent only to Mr. Selch. In addition, on March 2, 2009, the Benk wrote to Mr. Selch and advised him that the collateral on his loan had been liquidated and that his loan balance remained due. The Bank thereafter commenced the Illinois Bution and obtained the Consent Judgment agalnst Mr. Selch in the principal sun? of $992,Q00, whlch represented the amount then remaining due under the Pledge Agreement and Promissory Note. Notably, the Consent Judgment was agalmt Mr. Sekh only, and not against Fleming. In oppositioh to Fleming's motion, plaintiff submits her own affidavit and 8 Forbearance Agreement Adjourning UCC Co-op Foraclssuke Sale ("Forbear?Ince Agree execukd.by the Bank, Mr. Selch, m d Fleming on July 14, 2010. Under the Forbearense Agreement, defendants were afforded additional time to locate a purchaser f4r the co-op in order to avoid(8 foreclosure sale. The Forbearance Agreement provided at 'paragraph 5(E) that if the property w m Gold wlthln the allowed adjourned tine, 1 qrqed 8 s foll,ows; "first4 to'the payment of any outstandinq m a$sgssmenl, etc. due to Third ConW~r~w&i Gorp,); becond, to Lehder, in the amount of forbqarance fe&; third, to Lender In ap amb qrn6wt due under tho Co-op loan to tho Borr&ver$, Itlcl!ddihEj,' attorneys' fees and casts and expmses incu with the scheduled wle, atc.; fourth, to L e d u$ applic86le interest fhqreon pn I g $elch; flflh, ta the Bwrower (Aff. in Opp., E I 1 Plaintiff B$~erts her affidavit that, nohvlthstanding in signed only by Mr. $&h Zrnd that the Qonsent Judgment'wwas Mr. Selcb Qnly, Flaming I I Page5of 12 I [* 6] I I I agreed under paragraph 5(E) that the $292,000 balance I to come out of Fleming s share of s the co+opsale proceeds as Plaintiff therefore claims that Fleming has effectively acknowledged her co-equal liability for the line of credit indebtedness that plaintiff guaranteed. Plaintiff also asserts that the Guaranty was never intended to be a gratuitous gift for the benefit of defendants, and that she fully expected that defendants would reimburse her for any payments she had to make to the Bank under the Guaranty. D18CUSSION A, f l ~ion to Dismiss Standards t CPLR 321 1 (a)(l)permits a defendant to seek dismissal of a cause of W o n on the grwrrd that the defendant has a defense founded upon documentary evidence. The Court may i grant dismissal when the documentary evidence submitted by the defeqdant conclusively establishes a defense to the agserted daims BS a mzltter of law (Leon v Martlner, 84 NY2d 83, 88 [1994]; also Goshen v Mutuel Life /us. Co. of N. Y , , 98 NY2d 314, 326 [2002]; See Kram Knae LLC v Djonovic, 74 AD3d 628, 628 [l st Dept 201 01;IMQ Indus. Inc. v Anderson K;// & Olick, P.C., 267 AD2d 10,10 [l st Dept 1 Q991). OPLR 321 1 (a)(7) permits a defanddnt ts geek disrnigsirrl of a caMSe qf actlon for failure to state a claim. In evaluating a motion to dismiss pursuant tb: CPBR $21 I5(a)(7):tho Ooyrt I ffmd the pleadings a liberal cqtyjtructlqrt, toke the all wide plaintiff the benefit of every possible inference k q , 5 NY3d 1 1 , 19 [20&]; $88 also Harris v IG Green~o/nnY Cor@., AD3d 608,608-09[lst 72 pept,40101; Gotdik v Mourlt Sinai Mo$p. Ctr., 3 9 AD3d 319, $t[lst Dept 2005]), The sde bhidn is whether the pleading states q Cause of action, afid itfrom its fqur r6 ,factual I dlegations are disqerned whiah taken together manifeet any 08 dismissal will be debied (see Guggenhaimer v Ginzburg, 43 NY2 able at law, e, 276 [i,W]; Harris, 72 3PI~lr)tlff clqlms that $292,000 the balance rernalnlng after plalntlfea $700,000 payment to the Elank under la the Guaranty. I [* 7] AD3d at 609; Amero ex re/ Almazan v Geni Reelty C o p ., 60 AD3d 491 492 [l st Dept 20091 [ a I court may freely consider affidavits submitted by the p1aiptif.Pto remedy eny defects inthe complaint, the criterion being not whether the proponent of the pleading has simply etated a cause of action, but whether he or she actually has one ]). B. Cnnqtrwtive Trust Fleming fkst seeks to dismiss plaintiffs cause of action for a congtructiv& trugt for failure td state a d$im. She argues that the complaint fails to allage qny of the elamants necessary to establish such a claim as against her. Plaintiff argues that the aomplaint does set forth the requisite elements for imposition of a constructive trust against Fleming. A constructive trust is an equitable remedy employed to prevent unjuq! qnrichment (see Simoods v Shonds, 45 NY2d 233,242[1978]; Sharp v Kosrnelski, 40 NY24 119, I 2 1 [1976]). I In gerleral, four elements must be established before B c w t j May grant this raqedyr (1) a confidential Q flduciary relationship, (2) a promise, express gr impliedl (3) a tfgnafer in reliance r thereon, and (4) unjust enrichment (PQneffa v Kelly, 17 AQ3d 163, 185 [ l $ t Ddpt 29051; See sllw BetMrs $90. life Ins. SOCY.v Shakardge, 49 W 2 d r $E@, Lim, 75.ADtd 472, 473 [Ist D&ptb2010]]. As bQdW@w&)d gatisfy the demands of juStice. $to g. p(lWM $ allegations a$ truer and affordin infereri+q, the Cgwt finds that plaintiff has sufficiently II argues f h d the comRlaint does not allqge a confidgntia Fleming and plaintif/ since dbfendants were engqgedl i I sxe*pytedeed sqtisfied the Guarqnty, it is well estiabllshe w out of mlarital ot other family ret NY Cow1~ty-2001]; e also Zuc m 1Q861; Reinel d Reiner, 100 AD2d 872, 874 [2d Dept 19441). Here, plaintiff sufficl?isntlyQIlepw me 7 nf I 9 1 [* 8] that a confidential, family relatiohqhip existed, as plaintiff was Fleming's pother-in-law. The fact that defendants were engaged in adversarial divorce procoedings, even If plaintiff sided with her son, does not require a contrary finding (see Cinquemarri v Lazio, 37 AD3d 882, 883 [3d Dept 20071 [a confidential, family relationship existed among the partie6 despite the fact that the parties subsequently found themselves litigating against each other]). The Court further finds, however, that plaintiff has not suffioiently aIlegsd4ho remaining three elements so as to establish a cognizable claim for a constructive trust as against Fleming st (see Matter of Alpert, 37 AD3d 187, 189 [I Dept 20071; Ewart v Ewart, 78 AD3d 992,993 [2d Dept 20101; Delzer v Rozbicki, 85 AD3d 1722 [4th Dept 201 I]). With respect to the second element, Fleming argues that the wmplalnt fails to allege qny promise on her part. Plaintiff responds that she has pled sufficient f w t s to b there was an implied pfornisq that she would be reimbur'sed by both defeedant$ k r her expenditures under the Guaranty, since it was her execution Of the Gqeranty that dloW8d the Bank to renew be,line of credit that both defendants purportedly benefi~gd from. Plaintiff also I claims that,Fleming has acknowledged her co-liability fort $(e) of the Fqrbearance Agreement. Napgraph crqdilt inc The (bud finds that plaintiff has plod ng allegations sllffipi e, t$xptw$ Or implied, made by Fleming to plaintiff in u6 t@ Make~lq61 NY2d 806,808 [1984]; Khowy v Khavry, 60 433 v I 20091;Samantha Enters. v Elizabeth St., 5 AD3d 280,280 [Ist Dept 20041; Ew4rt, 78 AQ3d at 993), Plaintiff had essgntially conceded, and Indeed the doW - I 1the Pledgq Agrtaemant and Rrorqissdry Note underlying the li I I tanteed w$re signed pnly by Mrl Sdch, and not by flemin implied promige of Peimbursament made tp plaintiff by Mr. Sel which a similar promise mily ba inferrsd O the part of Fleming. yor doe6 the ForbearWse n Agreement, standihg alme, provide a sufficient basis upon whiqtl tP find 8r1implied promiss I [* 9] made by Fleming to plaintiff regarding the Guaranty. As to the third element, Fleming contends that plaintiffs actions wlth respect to the Guaranty were entirely voluntary and that plaintiff has not alleged a transfer made in reliance uppn a promise by Fleming. Plaintiff argues that her executlon and delivery of the Guaranty was not a gratuitous act, and was done in reliance on an implied promise that she would be teimbursed by bpth defendant$ for her expenditures under the Guaranty. and wag $rtricRsd at pleintiffs expense. In opposition, plaintiff argwq9 that it woulld be extrsrply I I ts tp retain the benefits of plalntlff'tsl p 'ince the p'roceeds af the line of oredit yI' I I The ufld6rlyir-q purpose ~f a ~onstructive trust is to preve Sharp, 40 NY2d at 123). "A person m$y be deemed to be unjw rqceived a benefit, the retention of wHibh would be unjust. A cdnolusion that on$ has been [* 10] pnjustly enriched is esgentially a legal inference drawn from the aircumstances wrrwnding the transfer qf property and the relationpihip of the parties (Id. [Nation omitted]; stge 61/S0 Cinquenlani, 37 AD3d at 883 [ As to the element of unjust eerichment, a person is unjustly enriahed when retention of the benefit received would be unlust congidering the Fircumstances of the transfer and the relationship of the parties ] [internal quotations omitted]; Nakamura v Fuji, 253 AD2d 387, 390 [Ist Dapt 19981). Here, the cbmplaint fails to allege facts sufficient to Wablish this element because plaintiff has not adequately alloged that 9 benefit was bestowed upon Flaming as a result of plaintiffs execution of the Guaranty, the retention of whikh would be unjust (st% M&B Joint Venture, lnc. v L a w s Master Fund, Ltd., 49 AD3d 258,258 [Ist Dept 20081;Krhoa Foods, InC. v Vhfqge F ~ o Cgrp., 30 AD3d 332, 333 [1st Dept 20063; ProSpect Plaza Tengnt Assn., Inc. v d New Yark City Hous. Aufh., 11 AD3d 409,401 [lst Dept 2004l). The docume establishes thpt the line of dredit that plaintiff guaranteed was extanded irl.20QdDpsed on B Pledge Agreement and Promissory Note that were exeolrted only by Mr. $eloh, &d the Consent Judgmant pettqined only to Mr. Selch, Thus, any bane plaintiff s execution of the Oqdranty, if m y , pertained to Mr. Sdt; Fleming s. Nor has plaintiff dkd ahy Condqct that Flstrning engaged irr dueed pl qintiff to e>teAqu t6 Guaranty. plaintiffs mere ~IISQGI II rorn the Guaranty simply b &e she lived in v e co-op and pl from the line of credit to pay for expense3 related tQthe c q q a t blic Natl. Tit. Ins. C against Fleming. Awordingly, Fleming's motion to dismiw the firgt Cause of wtion seeking a , I [* 11] construotive trust a$ against her is granted. C. UeIyst, Enrichment Fleming next argues that plaintiffs second cause of action for unjust emrichment should be dismissed based upon documentary evidence and for failure to state a claim. Fleming argues that the documentary evidence conclusively establishes that the Guaranty did not benefit her at plaintiff's expense, and that plaintiff merely qcted as a volunteer in gudranteelng the line of credit for her son. Plaintiff argues that the documentary evidence fails to refute the facts alleged in the complaint which she claim$ establish the elements of her claim for unjust enrichment, ar st the very least, raise8 factual disputss that preclude dismissal Of the komplaint. Unjust enrichment iq a quaai-contract theory of recovery, and "is 8r1obligation Imposed by equity to prevent injustice, in the absence of an actual agrQement between the parties ' concerned" (IDT Corp. v Morgm Stenldy Dean Wtter 8 Co., 12 NY3d 732,142;[20091), ''The essential inquiry in any claim for unjuet enrichment . . . is whether it i agalnlst gqyity and gbod s conscience to permit the defendant to retaip what is sought to be rQturned" (Paramwflt Film pisfrib. Cwp. v State of New York, 30 NYZd 415,421 [1972]), To swyessfull eririchmmt, a plaintiff must shdw'that: (1) the other party was enriched, (2) at , I expense, and (3) that it iq 8gainFt equity and good cotwienae to permit; the 6th in what is sought to be recovered (see Mandarin Trading Ltd. v WJldpn&in, 18 hJY& T73, I82 I ' [go111; Ge'orqio Adolone 8, Go., Inc. v Ralph Rieder, 926 NYS2d 494 [Ist bept 261'1])1 ' The facts as pled by plaiotiff gre insufficient to suppg an inferdnce of unjyrst enrbhrnent ' warranting the interference of equity a s against FlaMing. As foypd above in the Court's digcussioh of the constl'uctlve trusf elements, the documentary dvidehee urtlisputedlY establishes that th Pledge Agreem and Promissory Note underlying,tpg lih plaintiff guqtarltqed were signed only by Mr. Selch. The complaint Ifails to e$ta I ' eognizqble claim that Flernlrlg received q beneflt from plalntiff for which'ahq w ' enriched G plaintiff's expense (see Narth Salem Psychiafric Servs. v Medcio Health SoIuflW t Page 11 of 12 I [* 12] Inc., 50 AD3d 986,,987 Dept 20Q8]["Although the plaintiffs seek to recover !XI B theory of [2d 1 unjudt enrichmqnt, their cause of action does not conteh the necesf$aryallegation that the defendant unjuetly received something of value at the expmse of the plaintlffs"]; CDR Creences S A . v Euro-American Lodging Cop., 40 AD3d 421, 422 [ l s t Dept 20071; M&B, 49 AD3d at 288). I The court therefore finds that the complaint does not allege facts sbflicient tb support plaintiffs claim for unjust enrichment as 8gainFt Fleming. AcFardingly, Fleming's motion to dlsmlss the second cause of action for unjust enrichment as against her is granted. For these rqasons and upan the forggQing paper$, it is, ORDERED that Fleming's motion to dismiss plaintiff's first cause of atrtion for a construative trust and second cause of action for unjust enrichment is granteql; and it is further, ORDERED that the Clerk is ditected to enter judgment dismissing all klalrns in the cqmplaint a$ against Fleming; and It is further, ORDERED that the remainder of the actian shall continus; and It I further, s ORDERED that the I
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
