Geik v Geik

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Geik v Geik 2014 NY Slip Op 30319(U) January 31, 2014 Sup Ct, New York County Docket Number: 650911/11 Judge: Barbara R. Kapnick Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 02/03/2014 1] INDEX NO. 650911/2011 NYSCEF DOC. NO. 78 RECEIVED NYSCEF: 02/03/2014 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: BARBARA R. KAPNICK PART 39 Index Number: 650911/2011 INDEX N O . - - - - - GEIK, ALAN MOTION DATE _ _ __ vs MOTION SEQ. NO. - - - GEIK, SUSAN I Sequence Number : 002 AMEND CAPTION I PARTIES T~lrnmoWing papers; n~mbered 1 to _ _ , were read on this motion t o / f o r - - - - - - - - - - - - - Notice of Motion/Order to Show Cause - Affidavits - Exhibits Answering Affidavits - E x h i b i t s - - - - - - - - - - - - - - - - Replying Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ I No(s). _ _ _ _ __ I No(s). - - - - - 1No(s). _ _ _ _ __ Upon the foregoing papers, it is ordered that this motion.-· w u j:: en :::> ...., 0 MO I IOH tS DECIDED IN ACCORDANCE WilH ACCOMPANYING MEMORAi\NlUM DECISION l- o w 0:: 0:: w LL w 0:: ¢ ¢ >- !:!!. ..J ..J z :::> 0 LL en u < w I- w ~ w ·~:~ 0:: (!) z 0:: Cl) 3: - 0 w ..J en ..J < z LL ~ U -: 0 0 Ij:: 0:: 0 :E 0 LL 1. CHECK ONE:..................................................................... 0 CASE DISPOSED 2. CHECK AS APPROPRIATE: ........... ¢ ¢.............. MOTION IS: 0 GRANTED 0 3. CHECK IF APPROPRIATE: ...... ¢......................................... 0 SETTLE ORDER 0DONOTPOST DENIED ~GRANTED IN PART 0 SUBMIT ORDER 0 FIDUCIARY APPOINTMENT 0 REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IA PART 39 --------------------------------------x DECISION/ORDER Index No. 650911/11 Motion Seq. No. 002 ALAN GEIK and IRIS GEIK, Individually and as Executors of the Estate of REBA GEIK Plaintiffs, -againstSUSAN GEIK, Individually and as Executrix of the Estate of BERNARD GEIK, Defendant. --------------------------------------x BARBARA R. KAPNICK, J.: Before the Court is plaintiffs' motion for an order (1) granting leave to serve an amended complaint pursuant to CPLR 3025 (and to amend the caption to conform to the amended complaint and to serve a supplemental summons on defendant Susan Geik in her capacity as Trustee of the Bernard Geik Irrevocable Trust and on Mall Star Inc.); and (2) compelling defendant, pursuant to CPLR 3126, to produce unredacted copies of the correspondence produced in redacted form by defendant dated October 16, 2008 and November 4, 2008, regarding a buy-out under the shareholder's agreement, and dated May 11, regarding and insurance purchased to set up fund the 2001 American Consolidated and Affiliates Buy Trust. Defendant cross-moves, pursuant to CPLR 3211 (a) ( 7) , to partially dismiss the Complaint on the grounds that the tort claims asserted therein (second, third, fourth and eighth causes of action) fail to [* 3] state a cause of action for which relief may be granted as to defendant Susan Geik. At oral argument held on the record on December 18, 2013, this Court granted defendant's cross-motion to dismiss only as to plaintiffs' second cause of action for breach of fiduciary duty, and third and fourth causes of action for conversion asserted in the Complaint. This Court also granted plaintiffs' motion to amend the Complaint only to the extent of allowing plaintiffs to assert one new cause of action for common law actual and constructive fraud, and two new causes of action for breach of contract. Plaintiffs' motion to compel was adjourned to a status conference scheduled for February 5, 2014, which the Court now adjourns without reassignment of this case to a new Judge. a Finally, date pending decision was reserved as to the eighth cause of action (breach of fiduciary duty) asserted in the original Complaint which defendant moved to dismiss, and as to plaintiffs' proposed fourteenth under Debtor & Creditor Law ["DCL"] conveyance under DCL § § (fraudulent conveyance 273), fifteenth (fraudulent 276) and sixteenth (voiding of Bernard Geik's trust under Estates, Powers and Trusts Law ["EPTL"] § 7-3.1) causes of action. After further reviewing the papers, remaining issues. fiduciary duty, Bernard's Estate, including Reba. the Court now decides the As to the eighth cause of action for breach of plaintiffs had a allege that Susan, fiduciary duty to as Executrix Bernard's of creditors, They further allege that Susan breached this duty 2 [* 4] by failing to provide funds to discharge Bernard's obligation to pay for Reba's medical care and health insurance as required under the parties' Settlement Agreement. What plaintiffs allege is, claim based on the failure of in essence, Bernard's a breach of contract Estate contractual obligation to pay for Reba's healthcare. to perform its Given that this Court has already granted plaintiffs' request to amend the Complaint to assert such a breach of contract claim, defendant's motion to dismiss this cause of action is dismissed as duplicative. The Court will next consider plaintiffs' motion for leave to amend the Complaint. made and every distinguished from DCL § 276 provides that "[e]very conveyance obligation incurred with intent presumed by law, actual to intent, hinder, delay, as or defraud either present or future creditors, is fraudulent as to both present and future creditors." Since a claim under DCL § 276 is fraud-based, it must be pleaded with particularity. See United Nat'l Funding, LLC v. Volkmann, 25 Misc.3d 1233(A), *14 (Sup Ct, NY Co Nov. 17, 2009); Framer v. Yogel, 50 F.Supp.2d 227, 247 (SONY 1999); In re Sharp Int'l Corp., 403 F.3d 43, 56 (2d Cir. 2005). Here, because plaintiffs make their allegations upon information and belief, their motion to amend the Complaint to add a claim for violation of DCL 276 is denied. See United Nat'l Funding, supra at *14. 3 § [* 5] Plaintiffs also seek to amend the Complaint in order to assert a claim under DCL § 27 3. That statute provides that " [ e] very conveyance made and every obligation incurred 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 incurred without a fair consideration." Violations of DCL § 273, unlike claims under DCL § 276, need not be pleaded with particularity because an allegation of actual intent to defraud is not required; the allegation is based on the transferor's financial condition and the sufficiency of the consideration provided by the Menaker v. transferee. 1987); In re Sharp Alstaedter, Int' 1 Corp., 134 AD2d 281 B.R. 412, 506, 413 518 (2d Dep't (EDNY 2002). Plaintiffs allege in their proposed Amended Complaint that Bernard conveyed certain assets without fair consideration and that conveyances rendered Bernard and his Estate insolvent. such As such, plaintiffs' motion for leave to amend the Complaint is granted with respect to this claim under DCL Finally, EPTL for the use subsequent of § the creditors 273. § 7-3.1 provides that "[a] disposition in trust creator is of creator." the void as against the Plaintiffs existing allege or in the proposed Amended Complaint that Bernard transferred assets into his Irrevocable Trust for his own use, and that plaintiffs were existing and subsequent creditors of Bernard. 4 Accordingly, plaintiffs' motion [* 6] for leave to amend the Complaint is granted to the extent of allowing plaintiffs to assert this claim. Since plaintiffs fail to assert any cause of action directly against Mall Star, 1 which was purportedly dissolved in 2007 (Tr. 20: 3-4), their requ_est to amend the caption is denied insofar as it seeks to add Mall Star as a defendant, but is granted to the extent of amending the caption to add Susan Geik in her capacity as Trustee of the Bernard Geik Irrevocable Trust, and allowing plaintiffs to serve a Supplemental Summons upon her in that capacity. The caption of this action shall be amended to read as follows: SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: --------------------------------------x ALAN GEIK and IRIS GEIK, Individually and as Executors of the Estate of REBA GEIK Index No. 650911/11 Plaintiffs, -againstSUSAN GEIK a/k/a SANDRA GEIK, Individually and as Executrix of the Estate of BERNARD GEIK, and as Trustee of the BERNARD GEIK IRREVOCABLE TRUST, Defendant. --------------------------------------x 1 While plaintiffs generally allege that Mall Star was the beneficiary of the alleged fraudulent conveyances, they do not allege that Mall Star in any way "participated inn the fraudulent transfers. As such, plaintiffs have not sufficiently pled a cause of action against Mall Star pursuant to DCL §§ 273 or 276. See Sullivan v. Kodsi, 373 F.Supp.2d 302, 309-311 (SONY 2005). 5 [* 7] Plaintiffs are directed to serve a copy of this order with notice of entry on both the New York County Clerk and the Trial Support Office (Room 158), who are hereby directed to mark their records to reflect the amendment. Plaintiffs are further directed to file and serve their Amended Complaint in accordance with the directives herein within 30 days, and defendant shall have 30 days to file otherwise move with respect thereto. and serve an Answer or Counsel for the parties shall notify the Judge to whom this case is reassigned when they are ready to schedule a conference. This constitutes the decision and order of this Court. Date: JanuaryJ/, 2014 Barba'.ta R. Kapnick J.S.C. ~A. KAPN~C~i J.S.C. 6

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