Solomon v Silverstein

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[*1] Solomon v Silverstein 2017 NY Slip Op 51400(U) Decided on October 11, 2017 Supreme Court, Richmond County Minardo, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 11, 2017
Supreme Court, Richmond County

Laura Solomon, DCM PART 6, Plaintiff,


Audrey Silverstein, Defendant.

Philip G. Minardo, J.

The following papers numbered 1 to were marked fully submitted on the

10th day of August, 2017.


Defendant's Notice of Motion to Dismiss the Complaint pursuant to CPLR § 3211(a)(8), with Supporting Papers (dated April 5, 2017) 1

Plaintiff's Notice of Cross Motion, inter alia, to Strike theAnswer and Counterclaim pursuant to CPLR §§ 3124 and 3126, with Supporting Papers (dated July 5, 2017) 2

Defendant's Affirmation in Further Support of Motion to Dismiss and in Opposition to Cross Motion (dated August 4, 2017) 3

Plaintiff's Reply Affirmation (dated August 9, 2017) 4

Upon the foregoing papers, the motion of defendant Audrey Silverstein (Seq. No. 001) to dismiss the complaint pursuant to CPLR §§ 3211 (a)(5) and (a)(7) is denied; the cross motion (Seq. No. 002) of plaintiff Laura Solomon is granted, in part, and denied, in part, in accordance with the following.

On January 20, 2017, plaintiff Laura Solomon (hereinafter, "Laura") commenced this action against her sister, Audrey Silverstein (hereinafter, "Audrey"), to recover damages in the amount of $21,211.48 plus accrued interest, which represents plaintiff's alleged one-half share of a jointly-held bank account (hereinafter, the "Oritani account").

It is undisputed that on or about September 26, 2008, plaintiff's mother, Frances Asch (hereinafter, "Frances"), opened the subject bank account in the amount of $40,000.00, at Oritani Bank. On or about January 2, 2009, Frances added defendant Audrey to the account as a joint tenant. Subsequently, on or about May 21, 2010, Frances and Audrey allegedly agreed to add plaintiff to the account as an additional joint tenant.

Plaintiff claims that in 2008, in return for her assistance with Audrey in caring for their ailing mother, and "the physical and economic burden" involved in providing that care and assistance, she and defendant agreed that she would share in the expenses, time and effort of caring for their mother and would share in the funds of the Oritani account. Plaintiff points out [*2]that although her mother was the primary account holder of the account, it was Audrey (the defendant) who made decisions with respect to the "maintenance" of that account, which she "controlled" along with numerous other accounts. Unbeknownst to plaintiff, and allegedly without notice to the joint account holders (plaintiff and Frances), Audrey withdrew all of the funds from the Oritani account on February 27, 2012.

Frances passed away on December 18, 2012. Laura claims that she was unaware of the withdrawal of the Oritani funds and first learned that the account had been closed on or about January 16, 2014, when as co-executrix of the Estate of Frances Asch [FN1] , she commenced a so-called discovery and turnover proceeding pursuant to SCPA §2103, in Surrogate's Court, Richmond County. In that proceeding, Laura sought an "inquiry" concerning the alleged fraudulent withdrawals, diversion and conversion of funds from her mother's numerous brokerage accounts, a by-pass trust and certain bank accounts, including the Oritani account.

On September 14, 2016, Surrogate Robert J. Gigante rendered a Decision and Order granting the motion of Audrey Silverstein for summary judgment dismissing Laura's petition in the turnover proceeding as it pertained to the proceeds of the Oritani account. Surrogate Gigante held that (1) the decedent's estate would not be entitled to any portion of the account inasmuch as the proceeds of that account were withdrawn by a joint tenant prior to the decedent's death, and (2) litigation involving the Oritani account was a dispute between living parties over which the Surrogate's Court lacked jurisdiction. This action ensued, wherein plaintiff has asserted causes of action, for conversion (the first), fraud (the second), the imposition of a constructive trust (the third) and breach of contract (the fourth).

Presently before this Court is defendant's motion to dismiss the complaint on the grounds, inter alia, that (1) plaintiff failed to timely file proof of service of the summons and complaint with the clerk of this court (CPLR §308); (2) the cause of action for conversion is barred by the applicable three-year Statute of Limitations (CPLR § 214[3]); (3) plaintiff failed to plead the elements of fraud with particularity (CPLR § 3016); (4) the cause of action seeking to impose a constructive trust fails to state a cause of action (CPLR § 3211[a][7]); and (5) the cause of action for breach of contract is barred by the Statute of Frauds (CPLR § 3211 [a][5]); General Obligations Law GOL §§ 5-701[1] and [2]).

In considering a motion to dismiss for failure to state a cause of action (CPLR § 3211[a][7]), it is well-settled that "the court must afford the complaint a liberal construction, accept the facts alleged in the complaint as true, [and] accord plaintiffs the benefit of every possible favorable inference" (Litvinoff v Wright, 150 AD3d 714, 715 [2nd Dept 2017] [citations and internal quotation marks omitted]; see Doria v Masucci, 230 AD2d 764 [2nd Dept 1996], lv denied 89 NY2d 811 [1997]; CPLR § 3026). In any such inquiry, the sole criterion is whether "from [the complaint's] four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law" (Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1997]; Doria v Masucci, 230 AD2d at 765). Moreover, a court may freely consider affidavits submitted by plaintiffs to remedy defects in the complaint, at which point the criterion becomes whether the pleader has a cause of action, not whether he or she has stated one (see Leon v [*3]Martinez, 84 NY2d 83, 88 [1994]; Rovello v Orofino Realty Co., 40 NY2d 633, 635-636 [1976]).

Also relevant to the instant matter is that "[g]enerally, the deposit of funds into a joint account in the name of such depositor...and another person and in form to be paid or delivered to either, or to the survivor of them constitutes prima facie evidence of an intent to create a joint tenancy" (Matter of Fayo, 7 AD3d 795, 796 [internal quotation marks omitted] [2nd Dept 2004], quoting Banking Law § 675; see Matter of Yaros, 90 AD3d 1063, 1064 [2nd Dept 2011]; Rosenzweig v Friedland, 84 AD3d 921, 923 [2nd Dept 2011]; Adams v Hickey, 35 AD3d 328, 330 [2nd Dept 2006]. "Therefore, a decedent who deposited money in a joint bank account is presumed to have conferred on the cotenant not only a mere expectancy, but rather a gift of a one-half interest in the deposited funds" (Adams v Hickey, 35 AD3d at 330 [internal citation omitted]; see Matter of Covert, 97 NY2d 68, 75 [2001]). Stated otherwise, "[w]hen a joint tenancy is created, each joint tenant has the right as a joint owner of the bank account to withdraw a moiety (half) or less than a moiety for his own use and thus destroy the joint tenancy as to such withdrawals" (Matter of Bricker v Krimer, 13 NY2d 22, 27 [1963]. It is well-established that the burden of refuting the rebuttable presumption created by Banking Law § 675 is on the party challenging the joint tenancy (see Banking Law § 675[b]; Matter of Kleinberg v Heller, 38 NY2d 836, 840 [1976]; Rosenzweig v Friedland, 84 AD3d at 923).

Applying the foregoing principles to the matter at bar, it is the opinion of this Court that plaintiff's allegations are legally sufficient to support her causes of action for conversion, fraud, and breach of contract.

More particularly, plaintiff asserts in the complaint that her sister's withdrawal of the entire balance of the Oritani account was fraudulent in that it invaded plaintiff's moiety interest in the account, and that her sister intentionally concealed the closing of the account and made false representations to plaintiff concerning its existence. "To establish fraud, a plaintiff must prove 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, and injury" (Curtis-Shanley v Bank of America, 109 AD3d 634, 634 [2nd Dept 2013]; see Lama Holding Co. v Smith Barney, 88 NY2d 413, 421 [1996]; Nerey v Greenpoint Mortgage Funding, Inc., 144 AD3d 646, 647 [2nd Dept 2016]). Viewing the allegations in the complaint in a light most favorable to plaintiff, a factual basis supportive of the elements of fraud has been adequately pleaded. In opposition, the moving defendant has not established that a material fact alleged by plaintiff "is not a fact at all" (Guggenheimer v Ginzburg, 43 NY2d 268, 275). Thus, dismissal of plaintiff's fraud claim pursuant to CPLR § 3211(a)(7) and CPLR § 3016 should not eventuate.

Turning to the cause of action for conversion, in order to recover damages for such a cause of action, "the plaintiff must show legal ownership or an immediate superior right of possession to a specific identifiable thing and must show that the defendant exercised an unauthorized dominion over the thing in the exclusion of the plaintiff's rights" (Matter of Channel Mar. Sales, Inc. v City of New York , 75 AD3d 600, 601 [2nd Dept 2010]; see Greater Bright Light Home Care Servs., Inc. v Jeffries-El, 151 AD3d 818, 823-824 [2nd Dept 2017]; Nugent v Hubbard, 130 AD3d 893, 895 [2nd Dept 2015]; Mackey Reed Elec. Inc. v Morrone & Assoc., P.C., 125 AD3d 822, 824 [2nd Dept 2017]). Defendant maintains that this [*4]cause of action is barred by the applicable three-year Statute of Limitations (see CPLR § 214[3]) which she claims began to run on February 27, 2012. Assuming, arguendo, that plaintiff, in fact, had knowledge of the closure of said account on that date, which is disputed, the instant action was commenced within six months of Surrogate Gigante's dismissal Order dated September 16, 2014 and arises from the same transactions or occurrences. Since the within "new action" would have been timely commenced at the time of commencement of the prior action, which was not terminated by (1) a voluntary discontinuance, (2) a neglect to prosecute the action, (3) a failure to obtain personal jurisdiction over defendant, or (4) a final judgment upon the merits, the requirements of CPLR § 205(a) have been satisfied. Thus, plaintiff's cause of action for conversion is not barred by the Statute of Limitations as defendant contends.

As for plaintiff's breach of contract claim, it is well-established that the doctrine of part performance may be invoked to take a contract out of the Statute of Frauds if the actions alleged as constituting partial performance (i.e., plaintiff's allegations that since 2008 she shared in the expense, time and effort in caring for and assisting her ailing mother) can be characterized as unequivocally referable to the challenged agreement (see Matter of Hennel, 29 NY3d 487 [2017]; Anostario v Vincinanzo, 59 NY2d 662, 663 [1983]). As such, dismissal of the cause of action for breach of the alleged oral contract pursuant to CPLR 3211(a)(5) would be premature at this early stage of the proceedings (see Barash v Estate of Sperlin, 271 AD2d 558, 559 [2nd Dept 2000]).

The same can be said for the third cause of action which seeks to impose a constructive trust. "To obtain the remedy of a constructive trust, a party is generally required to establish four factors, or elements, by clear and convincing evidence: (1) a confidential or fiduciary relationship, (2) a promise, (3) a transfer in reliance thereon, and (4) unjust enrichment flowing from the breach of the promise" (Sanxhaku v Margetis, 151 AD3d 778, 779 [2nd Dept 2017]; see Sharp v Kosmalski, 40 NY2d 119, 121 [1976]; Kaprov v Stalinsky, 145 AD3d 869, 870 [2nd Dept 2016]; Diaz v Diaz, 130 AD3d 560, 561 [2nd Dept 2015]). Although these elements must be proved by clear and convincing evidence (see Diaz v Diaz, 130 AD3d at 561), they "serve only as a guideline, and a constructive trust may still be imposed even if all four...are not established because the constructive trust doctrine is given broad scope to respond to all human implications of a transaction in order to give expression to the conscience of equity and to satisfy the demands of justice" (Sanxhaku v Margetis, 151 AD3d 778, 779 [2nd Dept 2017] citing Ning Xiang Liu v Al Ming Chen, 133 AD3d 644, 645 [2nd Dept 2015]).

In the matter at bar, accepting the facts pleaded as true and considering any affidavits submitted by plaintiff to remedy any defects in the complaint, it is the Court's opinion that the required element of a "transfer" by plaintiff to defendant in reliance upon the alleged promise is clearly lacking here. Nevertheless, Laura, as a designated joint account- holder, possessed a beneficial interest in the Oritani account (see Matter Harold, 112 AD3d 929, 931-932 [2nd Dept 2013]) which arose from her mother's gift of a joint share of the deposited funds (see Adams v Hickey, 35 AD3d at 330). Applying "a broad scope" to the remedy of a constructive trust, and "in order to give expression to the conscience of equity and...satisfy the demands of justice" (Ning Xiang Liu v Al Ming Chen, 133 AD3d at 645; see Sanxhaku v Margetis, 151 AD3d at 779), it would be premature to dismiss this cause of action at this early stage of the proceedings.

Turning to the cross motion which is presently before the Court, plaintiff seeks an order [*5](1) pursuant to CPLR §§ 3124 and 3126, striking the counterclaim of defendant, [FN2] (2) striking defendant's affirmative defenses for failure to adequately respond to plaintiff's demand for bill of particulars and notice for discovery and inspection, (3) precluding defendant from offering evidence at trial in defense of this action for failing to timely and adequately respond to the above demands, (4) for sanctions against defendant for her frivolous, libelous and baseless counterclaim, and (5) enlarging plaintiff's time to e-file her affidavit of service in this action.

Without addressing the merits of defendant's purported counterclaim, this Court will not impose the penalties sought pursuant CPLR § 3126 (2) and (3) absent a showing by plaintiff that defendant wilfully failed to disclose information or refused to obey an order for disclosure. As such, the branch of the cross motion which seeks this relief and sanctions must be denied without prejudice. The branch of the cross motion which is to compel disclosure pursuant to CPLR § 3124 is granted solely to the extent that this matter shall be set down for a compliance conference on ________________________.

Accordingly, it is

ORDERED, that so much of the motion of defendant Audrey Silverstein seeking to dismiss the complaint pursuant to CPLR §§ 3211 (a)(5) and (a)(7) is denied in its entirety;

ORDERED that the cross motion of plaintiff Laura Solomon is granted solely to the extent that (1) this matter shall be set down for a compliance conference, and (2) plaintiff's time to e-file the affidavit of service of the summons and complaint in this action is enlarged to the date it was e-filed, i.e., June 30, 2017, nunc pro tunc; and it is further

ORDERED, the Clerk shall mark his records accordingly.

E N T E R,

Dated: October 11, 2017

/s/ Philip G. Minardo

J.S.C. Footnotes

Footnote 1:To the extent relevant, both sisters, Laura Solomon and Audrey Silverstein, were appointed Co-Executors and issued Letters Testamentary in the Estate of Frances Asch on June 25, 2013.

Footnote 2:Defendant's counterclaim to recover damages in the amount of $100,000.00 is predicated upon her attorney's alleged violation of the Judiciary Law § 487 and the doctrine of respondeat superior. Defendant asserts that the verification of the complaint by plaintiff's attorney is patently false and made with the intent to deceive the court, which constitutes "wrongful and morally culpable conduct" for which plaintiff is responsible.

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