Spinella v Costantino

[*1] Spinella v Costantino 2011 NY Slip Op 52219(U) Decided on December 12, 2011 Supreme Court, Kings County Battaglia, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 12, 2011
Supreme Court, Kings County

Constance Spinella, Plaintiff,

against

Frank J. Costantino, FRANK COSTANTINO, and CARMELLA COSTANTINO, Defendants,



25510/10



Plaintiff was represented by Richard A. Kaplan, Esq. of DiConza, Larocca, Dicunto & Kaplan, LLP. Defendants were represented by Kenneth A. Kanfer, Esq. of Snitow Kanfer Holtzer & Millus, LLP.

Jack M. Battaglia, J.

Recitation in accordance with CPLR 2219 (a) of the papers considered on defendants Frank J. Costantino's, Frank Costantino's, and Carmella Costantino's motion for an order: pursuant to CPLR 3211(a)(7), dismissing Plaintiff's Amended Verified Complaint on the ground that it fails to state a cause of action; pursuant to CPLR 3211(a)(5), dismissing Plaintiff's Fourth and Fifth causes of action on the ground that they are time-barred; and pursuant to CPLR 6514(b) and (c), cancelling the notice of pendency and awarding costs, expenses, and fees:

-Notice of Motion to Dismiss the Amended Complaint

Affirmation of Kenneth A. Kanfer in Support of Motion to Dismiss the Amended Complaint and Related Relief

Exhibits A-F

-Affirmation of Richard A. Kaplin, Esq. in Opposition to Motion to Dismiss

Affidavit of Constance Spinella in Opposition to Motion to Dismiss

Affidavit of Anthony Spinella in Opposition to Motion to Dismiss

Affidavit of Carol D'Orazio in Opposition to Motion to Dismiss

Affidavit of Gracemarie Caponetta in Opposition to Motion to Dismiss

Exhibits A-K

-Memorandum of Law in Opposition to the Defendant's [sic] Motion to Dismiss the Complaint and for Related Relief

-Reply Affirmation in Further Support of Motion to Dismiss the Amended Complaint

Plaintiff was represented by Richard A. Kaplan, Esq. of DiConza, Larocca, Dicunto & [*2]Kaplan, LLP. Defendants were represented by Kenneth A. Kanfer, Esq. of Snitow Kanfer Holtzer & Millus, LLP.

In her Amended Verified Complaint, Plaintiff alleges, among other things, that she resides at premises located at 673 82nd Street in Brooklyn ("the premises") with defendants Carmella Costantino and Frank Costantino, who are her sister and sister's husband; that on February 10, 1977 "and for many years prior thereto", Plaintiff co-owned the premises with an "undivided one-half interest" with Carmella Costantino and Frank Costantino, who also owned an "undivided one-half interest"; "following Plaintiff's divorce", Plaintiff's ex-husband provided "little financial support" and defendant Frank Costantino was "frequently out of work", causing them "severe financial hardship"; that in March of 1978, Frank Costantino advised Plaintiff that "in order for the two families to survive their financial difficulties and keep their home, that it would be necessary for Plaintiff to transfer title to him and Carmella Costantino, and for Plaintiff to apply for social assistance and food stamps"; because Plaintiff was an "uneducated housewife with no business experience", she completely relied upon Frank Costantino on business and financial affairs; and that "[o]n March 4, 1978, Plaintiff executed a deed conveying her undivided one-half interest in the subject Premises to Defendants, without any consideration whatsoever and with the express and implied understanding that Defendants would re-convey her interest in the property to her upon her request."

Plaintiff alleges that since March 4, 1978, she has continued to reside in the premises with Defendants; that Defendants "assisted Plaintiff in handling and managing Plaintiff's financial affairs by collecting Plaintiff's public assistance income checks and all other income and by depositing same into either Defendants' own checking account, or a joint account in the name of both Plaintiff and Defendants, making disbursements based on Plaintiff's one-half ownership interest in the property to maintain and improve the subject Premises"; that since Plaintiff was preparing her last will and testament, she requested that Defendants reconvey her interest in the property; that Defendants refused to do so; and that defendants Frank Costantino and Carmella Costantino transferred the property to their son, defendant Frank J. Costantino for no consideration. The Amended Verified Complaint purports to allege causes of action for imposition of a constructive trust, unjust enrichment, fraud, "undue influence", and "economic duress" as against all Defendants.

Constructive Trust and Unjust Enrichment

By short-form order, dated April 18, 2011, this Court denied Defendants' motion to dismiss Plaintiff's Verified Complaint, which only alleged causes of action for imposition of a constructive trust and unjust enrichment. Defendants fail to demonstrate how any of the new factual allegations contained in the Amended Verified Complaint would change this Court's determination as to those causes of action. Indeed, the crux of Defendants' contentions is that those two causes of action must be dismissed based upon the same grounds that Defendants raised in their prior motion to dismiss. As such, since Defendants' previous challenge to Plaintiff's causes of action for imposition of a constructive trust and for unjust enrichment was [*3]denied, Defendants are barred from again challenging those causes of action. (See CPLR 3211[e]; B.S.L. One Owners Corp. v Key International Manufacturing, Inc., 225 AD2d 643, 643 [2d Dept 1996].)

In any event, on a motion to dismiss pursuant to CPLR 3211(a)(7), "[t]he court must accept the facts alleged in the complaint as true, accord the plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory." (Kempf v Magida, 37 AD3d 763, 764 [2d Dept 2007].) Here, Defendants argue the merits of Plaintiff's allegations, rather than make any demonstration that Plaintiff's allegations do not state causes of action for imposition of constructive trust or unjust enrichment.

In any event, Plaintiff's allegations state causes of action for imposition of a constructive trust and for unjust enrichment (see e.g.; Squiciarino v Squiciarino, 35 AD3d 844, 845 [2d Dept 2006]; Johnson v Lih, 216 AD2d 821, 822-23 [3d Dept 1995]; Nockelun v Sawicki, 197 AD2d 507, 508 [2d Dept 1993]; Djamoos v Djamoos, 153 AD2d 871, 871-72 [2d Dept 1989]; Farano v Stephanelli, 7 AD2d 420, 424 [2d Dept 1959]; Blakely v Ewart, 20 Misc 3d 1137 [A], 2008 NY Slip Op 51771[U], * [Sup Ct, Kings County 2008].)

Accordingly, the branches of Defendants' motion to dismiss Plaintiff's causes of action for imposition of a constructive trust and unjust enrichment are DENIED.

Fraud

Defendants also contend that they are entitled to an order, pursuant to CPRL 3211(a)(7) dismissing Plaintiff third cause of action alleging fraud, which was not included in Plaintiff's Verified Complaint. In this regard, Plaintiff alleges, among other things, that at the time of conveyance, "the Defendants represented to Plaintiff that the conveyance was in name only, the Plaintiff continued to own a one-half interest in the Premises and that upon her request, the Premises would be reconveyed to her"; that "over the ensuing years", Defendants repeatedly assured Plaintiff that they would reconvey her interest; and that "Defendants [sic] representations were false" since "they had no intention of reconveying the Premises to Plaintiff."

"To sustain a cause of action alleging fraud, a party must show a misrepresentation or a material omission of fact which was false and known to be false by the 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." (Cayuga Partners, LLC v 150 Grand, LLC, 305 AD2d 527, 527-28 [2d Dept 2003].) A cause of action for fraud "cannot be maintained unless it alleges misrepresentation of a present or pre-existing fact known to be untrue by the party making it with the intent to deceive and for the purpose of inducing the other party to act upon it causing injury. It cannot be based upon a statement of future intentions, promises or expectation which were speculative or an expression of hope at the time when made, rather than an assumption of fact." (Roney v Janis, 77 AD2d 555-556-57 [1st Dept 1980], aff'd 53 NY2d 1025 [1981]; see also Lincoln Place LLC v RVP Consulting, Inc., 16 AD3d 123, 124 [1st Dept [*4]2005]; Cerebono v Price, 7 AD3d 479, 480 [2d Dept 2004]; Satler v Merlis, 252 AD2d 551, 552 [2d Dept 1998] ["It is well established that a cause of action alleging fraud may not be based on disappointment that a promised future benefit did not materialize"]; Blakely v Ewart, 20 Misc 3d 1137 [A], 2008 NY Slip Op 51771[U], at *5.) "The general rule is that fraud cannot be predicated upon statements that are promissory in nature at the time they are made and which relate to future actions or conduct." (Cerebono v Price, 7 AD3d at 480.)

Here, the alleged false misrepresentations, i.e., that Defendants would reconvey her property interest to her, are predicated upon alleged statements that are promissory in nature or statements of future intention that are not actionable as fraud. (See id.; see also Blakely v Ewart, 20 Misc 3d 1137 [A], 2008 NY Slip Op 51771[U], at *5.)

Accordingly, the branch of Defendants' motion seeking to dismiss Plaintiff's cause of action alleging fraud is GRANTED.

Undue Influence and Economic Duress

Defendants contend that Plaintiff's causes of action for "undue influence" and "economic duress" are time-barred. "On a motion to dismiss a complaint pursuant to CPLR 3211(a)(5) on statute of limitations grounds, the moving defendant must establish, prima facie, that the time in which to commence the action has expired. The burden then shifts to the plaintiff to raise an issue of fact as to whether the statute of limitations is tolled or is otherwise inapplicable." (See Baptiste v Hardin-Marin, 88 AD3d 752, 753 [2d Dept 2011].)

"Undue influence" and "economic duress" are not causes of action, but are grounds for rescission of a contract (see e.g. Hosseiniyar v Alimehri, 48 AD3d 635, 635-36 [2d Dept 2008]; Pacchiana v Pacchiana, 94 AD2d 721, 722 [2d Dept 1981]). Actions for rescission are governed by a six-year statute of limitations (see CPLR 213[1].) Here, since the conveyance of Plaintiff's interest in the property occurred in 1978, over 33 years ago, Defendants sufficiently demonstrate prima facie that Plaintiff's claims for rescission of contract based upon "undue influence" and "economic duress" are time-barred.

In opposition, Plaintiff contends that the statute of limitations was tolled on account of continuing undue influence and economic duress from 1978 until Plaintiff brought the instant action. (See Hosseiniyar v Alimehri, 48 AD3d at 635-36 [holding that "in the absence of continuing duress or undue influence", an action to rescind a contract accrues once the agreement is executed]; see also Zoe G. v Frederick F.G., 208 AD2d 675, 677 [2d Dept 1994] [characterizing "duress" as a toll for purposes of statue of limitations].)

To demonstrate "undue influence", a plaintiff must show that the influence amounts "to a moral coercion, which restrained independent action and destroyed free agency, or which, by importunity which could not be resisted, constrained [plaintiff] to do that which was against [her] free will and desire, but which [she] was unable to refuse or too weak to resist." (See Matter of [*5]Estate of Greenwald, 47 AD3d 1036, 1037 [3d Dept 2008].)

"Economic duress exists when a party is forced to agree to a contract by means of a wrongful threat which precludes the exercise of its free will." (See Finserv Computer Corp. v Bibliographic Retrieval Services, Inc., 125 AD2d 765, 766 [2d Dept 1986].) "The law in New York is clear that in order to have a situation involving economic duress' there must have been some sort of obligation on the part of the party to perform." (Bethlehem Steel Corp. v Solow, 63 AD2d 611, 611 [1st Dept 1978].) Financial pressures and unequal bargaining power are not, in themselves, sufficient to show economic duress. (See id.)

In support of her contentions, Plaintiff points to her own affidavit in which she avers that after the conveyance in 1978, she deposited all of the funds that she collected through public assistance, various jobs, and later social security into an account jointly held with defendant Frank Costantino in order to cover living expenses and the costs of maintaining the property; that "up until the institution of [this] litigation, [she] completely relied on Frank to make financial decisions on [her] behalf"; that in 2005, she received a personal injury award of $32,000; and that, at that time, Frank Costantino told her to give him the check, which would be deposited in his and his wife's name for Plaintiff's "protection"; and that a portion of that money was used to make improvements on the property.

Contrary to Plaintiff's contentions, none of these allegations amounts to either "undue influence" or "economic duress"sufficient to toll the Statute of Limitations. Plaintiff does not allege that Defendants made any threat that prevented her from taking legal action to rescind the conveyance at any time since 1978, or that she did not by her own free will allow Frank Costantino to use her funds for living expenses and to maintain the property in which she was residing. As such, Plaintiff fails to show that the Statute of Limitations was tolled by reason of economic duress or undue influence.

Accordingly, the branch of Defendants' motion to dismiss Plaintiff's causes of action for "undue influence" and "economic duress" is GRANTED.

In sum, the branches of Defendants' motion to dismiss Plaintiff's causes of action for imposition of a constructive trust and for unjust enrichment are denied, and the branches of Plaintiff's motion to dismiss Plaintiff's causes of action for fraud, "undue influence", and "economic duress" are granted. The branch of Defendants' motion to cancel the notice of pendency is denied.

December 12, 2011_____________________

Jack M. Battaglia

Justice, Supreme Court