Harlem Suites, LLC v Yerushalmi

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Harlem Suites, LLC v Yerushalmi 2012 NY Slip Op 32484(U) September 21, 2012 Supreme Court, New York County Docket Number: 107212/2011 Judge: Shlomo S. Hagler 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 OF THE STATE OF NEW YORK NEW YORK COUNTY 1 1 ' Index Number : 107213201 1 HARLEM SUITES, LLC vs. YERUSHALMI, DAVID SEQUENCE: NUMBER. 001 INDEX NO. Mono3 DATE MOTION $ E a NO. DISM ACTlONll NCONVENIENT FORUM The fpllowlng papen, numbrrsd 1 to Notlcs of MotIonlOrdsr to Show Cause Anrwsrlng Affldavlta Rsplylng Affldavttr - Exhlblts - - , wore read on thlr mptlon tonor - ExhlblG Affldavlts IN o IN O W . lNo(m). C ) . L 1 3 Upon the fcwgolng papers, It lo ordered that thlo mptlon Is i .., ..- ' ....... , .. \. _I ' - . . , I Dated: ..................................................................... 2, CHECK AS APPROPRIATE: ........................... 3. CHECK IF APPROPRIATE: ................................................ ION 1. CHECK ONE: DENIED (3RANTED IN PART 0OTHER SUBMIT ORDER 0DO NOT POST FIDUCIARY APPOINTMENT 0REFEREWCE [* 2] Index No. 107212/2011 Plaintiff, -against- DAVID YERUSHALMI, JOSEPH GOPIN, and 231 NORMAN AVENUE, LLC, DECISTON/OFLDER HON. SHLOMO S. HAGLER, J.S.C.: Defendant David Yerushalmi ( Yerushalmi ) moves for an order pursuant to CPLR 8 321 l(a)(S) and (7), dismissqng the e statute of limitations has expired I Suites, LLC, ( plaintiff ) opposes and the complaint fails to state a the motion. 2 8 2012 i I nd On or about March Avenue, LLC ( 231 LLC ) and Joseph Gopin ( Gopin ) entered into an operating agreement ( Agreement ) relating to 23 1 Norman Avenue Propei-ty Development LLC (the Company ). (See Exhibit 2 to the Motion). Thc Compuiiy was established to develop the property located at 231 Norman Avenue into a residential condorniniuin building. Pursuant to Section 3.4 of the Agreement, defendants Yerushalmi, Gopin and 231 LLC, along with non-parties Jonathan Ilan Ofir ( Ofir ) and Jonathan Rigbi ( Rigbi ), agreed tojointly and severally guaranty thereturn of plaintiff s capital contributions (the HS Funds ) within four years of the date of the Agreement. Simultaneously with the execution nf the Agreement, defcndants executed a Guaranty and Security Undertaking (the Guaranty ), that bound them,Joinlly and severally, as guarantors of the return of the funds to plaintiff. (See Exhibit [* 3] 2 to the Motion). Section 3.4 of the Guaranty also contained representations and warranties as to the net worth of defendants. Specifically, it listed the net worth of David Yerushalmi at $8,000,000.00,Joseph Gopin at $10,000,000.00and 231 LLC at $525,000.00. (See Exhibit 1 to the Motion). The parties also entered into a construction agreement on the same day. Pursuant to Section 3.6 of the construction agreement, plaintiff agreed to provide the Company with $1,750,000.00 of capital, which was to bear 10% interest per annum. Pursuant to section 3.9 of the construction agreement, the defendants along with non-parties Ofir and Rigbi agreed to be jointly and severally liable for the return of the HS funds within 4 years of the date of the construction agreement. On September 5,2007, the Company refinanced the project debt with North Fork Bank, paid off ii prior mortgage and plaintiff received the remaining $917,000.00.An additional $45,000.00was paid to plaintiff i n Novenibcr 2007, In a previous action filed in Supreme Court, New YorkCounty undcr the caption Harlem Suites, LLC v. 231 Norman Avenue, LLC, et al., Index Number 603 178/2008, plaintiff, in the First Amended Complaint filed on or about October 5,2009,claimed therc was a sum of $1,525,759.00 of outstanding HS Funds as of March 4,2009. Plaintiff was grantcd summaryjudgrnent i n lhat amount for breach of contract against 231 Norman Avenue, LLC, DCI, USA, lnc, Yerushalmi, Gopin, Rigbi and Ofir. Plaintiff, in this action, now claims that the representations of net worth made in section 3.4 of the Guaranty wcre knowingly false and/or recklessly misleading when they were made and in justifiable reliancc on these representations, plaintiff agreed to providc the Company with funds. Plaintiff claims to have been damaged in the amount of $2,497,791.00. (See Exhibit 1 to the Motion). -2- [* 4] Motion to Dismiss It I S well settled that in determining a motion to dismiss pursuant to CPLR $321 I , the courts must liberally construe the pleadings, accept the facts as alleged to be true and interpret them in light most favorable to the non-movant. See, Leon v. Martinez, 84 N.Y.2d 83 (1994). In Cron v. Hargrp Fabrics, Inc., 91 NY2d 362 (1998), the Court of Appeals clearly set forth the standard for deciding a CPLR 6 321 1 motion to dismiss as follows: On a CPLR 32 1 1 motion made against a complaint, a court must take the allegations as true and resolve all inferences which reasonably flow therefrom in favor of the pleader (see, Sanders v Winship, 57 NY2d 391, 394). In opposition to such a motion, a plaintiff may submit affidavits "to remedy defects in the complaint" and "prcscrve inartfully pleaded, but potentially meritorious claims" (Rovello v 0rofi.o Realty Co., 40 NY2d 633,635,636; hut see, American Indus. Contr. Co. v Travelers 11zdem. Go., 42 NY2d 1041, 1043). Though limited to that purpose, such additional submissions of the plaintiff, if any, will similarly be "given their most favorable intendment" (Arriiigtoii v New York Times Co,,55 NY2d 433, 442). 91 NY2d at 366. Statute of Limitatiorpj An action based upon fraud must be commenced within six years from the date of the fraud or two years from the time the plaintiff discovered the fraud. CPLR 5213(8). Plaintiff alleges that defendants committed fraud when they signed the Guaranty on March 5 , 2005. (See Exhibit ''1'; to the Motion). This action was commenced more than six years later on June 21, 2011. There is no allegation in thc cornplaint that thcre was any subsequenl discovery within two years of the action. As such, the claim is seemingly time-barred pursuant to CPLK $213(8). Once the defendant makes a priina,facia showing that the action is seemingly time-barred, the plaintiff hears the burden of cstablishing the two year discovery exception. (Dovon v Bascom, -3- [* 5] 38 AD2d 645 [3rd Dept 19711; fillman v Citv of New York, 263 AD2d 529 [2d Dept 19991 Iv denied 94 NY2d 759 [2000]). In opposition to defendant s motion, plaintiff merely submitted an attorney s affirmation in opposition along with a deposition of David Yerushalmi, a no-show deposition transcript of Joseph Gopin and a memorandum of law. While plaintiff s attorney claims in the memorandurn of law that plaintiff did not discover the alleged fraud until Yerushalmi s deposition in October 2010, and the, action is timely under the two year discovery exception, there is no affidavit or any other evidence submitted to support this claim. An attorney s affirmation and memorandum of law have no probative value as they are not made by a party with personal knowledge of the facts. Webringer v Helmsley Spear, 91 AD2d 585 (1st Dept 1982) aff d 59 NY2d 688 (1983). The deposition, which was signed by Yerushalmi, has probative value but has no relation to the alleged fraudulent acts as it was merely a post-judgment deposition to ascertain defendant s assets following the summary judgment ruling in the earlier proceeding. Plaintiff took Yerushalmi s deposition to ascertain and discover the whereabouts of his assels in 2010 to obtain payment of the earlier judgment. The alleged fraud was that Yerushalmj misrepresented his assets in 2005. The deposition, however, does not contain information regarding Yerushalmi s assets in 2005. This Court, even after accepting all allcgations as true, is not ahle to infer from either thc complaint or the deposition that plaintiff discovered the fraud within the last two years. The discovery exception to the statute of limitations for. fi-aud is inappliciiblc hecausc plaintiff has failed to allege sufficient facls that it could not have discovered the fraud earlier than two years from the date the action was commenced. Gonik v Israel Discount Bank of N.Y., 80 AD3d 437,438 (1st Dept 201 1). -4- [* 6] Even assuming urguendo that you can infer from the deposition that Yerushalmi misrepresentcd h i s assets in 2005, plaintiff failed to submit an affidavit that the information contained in the deposition was newly discovered at the deposition for the first time, and therefore falls within the two year discovery exception period, Therefore, the motion is granted and the action dismissed as being time-barred. Conclusion Accordingly, this Court grants the motion dismissing this action. The foregoing constitutes the decision and order of the Court. Courtesy copies of this decision and order have been sent to counsel for the parties. Dated: September 2 I , 20 12 New York, New York Hon. Shlomo S . Hagler, J. S. C. I -5-

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