Sunshine Care Corp. v Davis

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Sunshine Care Corp. v Davis 2011 NY Slip Op 32263(U) August 8, 2011 Sup Ct, Nassau County Docket Number: 014291-09 Judge: Arthur M. Diamond 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. ............................ .......... ..... .... .... [* 1] SUPREME COURT - STATE OF NEW YORK Present: HON. ARTHUR M. DIAMOND Justice Supreme Court ----------------------------------------------------------------------- x SUNSHINE CARE CORP., d/b/a HEMPSTEAD PAR NURSING HOME, TRIL PART: NASSAU COUNTY Plaintiff, ACTION NO: 1 -againstINDEX NO: 014291DEBRA DAVIS Defendant. MOTION SEQ. NO:l, ------------------------------------------------------------------ J( SUNSHINE CARE CORP. d/b/a HEMPSTEAD PARK NURSING HOME, SUBMIT DATE:07/22/11 Plaintiff, ACTION NO: 2 lo- oI9 -againstDOROTHY JOHNSON Defendants. ----------------------------------------------------------------- x The following papers having been read on this motion: Notice of Motion................................ !, 2 Cross M 0 tio D............... ................... .... Rep Iy Plaintiff, SUNSHINE CARE CORP. d//a HEMPSTEAD PARK NURSING HOME , has moved for consolidation and joint trial pursuant to CPLR 9 602(a). Defendant , DOROTHY JOHNSON , in Action No. 2 opposes the motion and cross-moves to dismiss the matter for failure to state a cause of action against the defendant pursuant to CPLR 9 3211 (a )(7), and fuer dismiss the matter for failure of the plaintiff to engage in discovery or alternatively precluding evidence that has not been subject to discovery pursuant to CPLR 9 3126. The related action revolves around the alleged debt of James Edwards and the alleged liabilty of the defendants for fraud , constrctive fraud , and violation of the New York State Debtor and Creditor Law (" DCL" ) for their fraudulent conveyances of the Edwards assets and/or resources [* 2] rendering the Edwards and/or his estate insolvent as a result thereof, and unable to pay his debts including to HEMPSTEAD. In Action No. , the verified complaint alleges fraud , constrctive fraud , and violation of the New York State Debtor and Creditor Law as against Debra Davis. In Action No. , the verified complaint also alleges fraud , constructive fraud , and violation of the New York State Debtor and Creditor Law as against DOROTHY JOHNSON. Both actions concern the estate of the decedent James Edwards , and monies owed to the plaintiff, SUNSHINE CARE CORP. d//a HEMPSTEAD PAR NURSING HOME. CPLR 9 602(a) is intended to consolidate cases to avoid unecessar costs and delay when the actions involve a common question of law or fact. Although a motion pursuat to CPLR 9 602(a) is addressed to the sound discretion of the tral cour, consolidation is favored by the cours in serving the interests of justice and judicial economy. Flaherty v. RCP Assocs. 208 A D 2d 496 (2nd Dep t 1994). The action at hand involves the same common questions of facts as well as the same issue oflaw. The fact that the actions are in different procedural states will cause minimal to no har to the defendants in Action No. 1 and Action No. 2 if consolidation is granted. Defendant in Action No. 1 has provided some limited discovery responses and no discovery has been exchanged between the paries in Action No. 2. Furhermore , depositions have not yet been conducted in either action. Thus , no prejudice would result from consolidation of these matters at ths time. In order to reduce the need for duplicative judicial resources , plaintiffs ' motion to consolidate is granted. Defendant moves under CPLR 9 3211(a)(7) to dismiss all three matters for failure to state cause of action against the defendant. In considering such a motion, the cour must accept the facts as alleged in the complaint as true , accord plaintiffs the benefit of every favorable determine whether the facts as alleged fit within any cognizable legal theory. Sokol v. inference , and Leader 74 A D 3d 1180 (2 Dept 2010). The first cause of action maintains that the defendant transferred assets away from the resident and/or his estate intending to defraud , hinder , delay, or otherwise prevent the plaintiff from collecting debts owed , in violation of New York Debtor and Creditor Law ("DCL" ) 9 276. The second cause of action maintains that the defendant transferred assets away from the resident and/or [* 3] his estate for unair consideration or no consideration at all , in violation of DCL 9 273. The third cause of action is for constrctive fraud. Plaintiffs complaint suffciently pleads all three causes of action. Regarding the first cause of action , DCL 9 276 provides that " every conveyance made and every obligation incured with actul intent , as distinguished from intent presumed in law, to hinder , delay, or defraud either present of futue creditors , is fraudulent as to both present and futue creditors. " Assuming the trth allegations in the complaint most favorable to the non-moving par, fort that the of the plaintiffs complaint sets the defendant intended by her actions of transferrng the assets and/or income away for no consideration to defraud , hinder , delay, or otherwse prevent plaintiff from collecting debts owed. As to the second claim of fraud in violation of DCL 9 273 , the statute states that " every conveyance and every obligation incured by a person who is or will be thereby rendered insolvent is fraudulent as to creditors without regard to his actual intent if the conveyance is made or the obligation is incured without fair consideration. " Thus , both insolvency and lack of fair consideration are prerequisites to a finding of constrctive fraud under AD2d 837 837- 838 (2d Dep t 2003). Assuming the trth favorable to the non-moving par, the plaintiffs 273. of the allegations Joslin v. Lopez 309 in the complaint most complaint sets forth that the monies from the decedent's estate were transferred for little to no consideration , rendering the estate insolvent. Moreover , with regards to the third cause of action , the defendant' s reliance on CPLR 9 30 16(b) to dismiss the claim for failure to plead a fraudulent claim with paricularty Plaintiff alleges a constructive fraudulent conveyance , which is not subject pleading requirements of CPLR 9 3016 because defendant is not required. for constrctive fraud , is misplaced. to the heightened the element of scienter upon the par of the Levin v Kitsis 82 AD3d 105 (2d Dep t 2011). In order to recover damages the following elements must be established: that (1) a representation was made , (2) the representation dealt with a material fact , (3) the representation was false , (4) the representation was made with the intent to make the other par rely upon it , (5) the other par did in fact , rely on the representation without knowledge of its falsity, (6) injur resulted and (7) the paries are in a fiduciar or confidential relationship. Del Vecchio v. Nassau County, 118 AD2d 615 (2d Dep t 1986). Unlike actual fraud , in order to recover damages for constructive fraud , the crucial exception is that the element of scienter upon the par of the defendant , his knowledge of the falsity [* 4] of his representation existence of a , is dropped and is replaced by a requirement that the plaintiff prove the fiduciar or confidential relationship waranting the trsting par to repose his confidence in the defendant and therefore to relax the care and vigilance he would ordinarily exercise in the circumstaces. Brown v. Lockwood, 76 AD2d 721 , 731 (N. Y. App. Div. 2d Dep t 1980). Plaintiff has sufficiently proven all elements required. Plaintiff sets forth that (1) defendant transferred all monies away from the decedent's estate rendering it in solvent; (2) therefore the monies were not available to pay off the debt owed to plaintiff, (3) the transfer was for little to no consideration, thereby false , (4) the transfer was made with the intent to defraud , hinder, or delay the plaintiff in recovering the monies owed , (5) the plaintiff relied on the monies in the estate to payoff the debt , (6) plaintiff have been injured in the amount of $22 653. confdential or fiduciar relationship with the , and (7) defendant was in a plaintiff by having authority and access of decedent's accounts and assets. Thus , plaintiffs claim to dismiss under CPLR 9 3016(b) is denied. Lastly, defendant moves under CPLR 93126 to dismiss matters for failure of the plaintiff to engage in discovery or alternatively precluding evidence that has not been subject to discovery. When the record does not reveal that the nonmoving par' s failure to comply with CPLR 9 3126 is wilful or contumacious , it is proper for the cour to deny the motion to strike the nonmoving party s answer. McCarthy v. Klein 238 AD2d 552 ( 2d Dep t 1997). Instead , the cours favor a , conditional order as an appropriate remedy when it affords the par who is refusing to comply with a disclosure order an additional opportunity to comply prior to the imposition of the final sanction. Casas v. Romanell 232 AD2d 445 ( 2d Dep t 1996). Therefore , it is so ordered that plaintiff must submit its responses to the discovery demand within 20 days of the date of this order , or it wil be precluded from introducing any evidence at trial as to the issues pertining to the outstanding discovery. Ordered that plaintiff SUNSHINE CAR CORP. d/b/a HEMPSTEAD PAR NURSING HOME motion pursuant to CPLR ~ 602(a) for consolidation of Action 1 against defendant DEBRA DAVIS and Action No. 2 against defendant DOROTHY JOHNSON , is granted; and it is fuer Ordered that defendant DOROTHY JOHNSONS' s cross motion to dismiss the matter for failure to state a cause of action against the defendant pursuant to CPLR 3211(a)(7), and fuher dismiss the matter for failure of the plaintiff to engage in discovery or alternatively precluding [* 5] evidence that has not been subject to discovery pursuat to CPLR 9 3126 , is denied as set forth herein. This constitutes the decision and order of this Cour. ENTER DATED: August 8 , 2011 ON. ARTHU M. DIAOND J. S. ENTERED To: Attorney for Plaintiff AUG 1 0 2011 NASSAU COUNTY Attorney for Defe PaNtNTY CLERK' S OFFICE ABRAMS, FENSTERMAN FENSTERM, EISMA, GREENBERG, FORMTO & EINIGER, LLP. KENNETH D. LITWACK, P. 1111 Marcus Avenue Suite 107 New York 11042 38- 08 Bell Boulevard , 2 Floor Bayside , New York 11361 ROBERT K. FISCHL, ESQ. Lake Success , 100 Ring Road, Suite 214 Garden City, New York 11530

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