Schubert v Ciccone

[*1] Schubert v Ciccone 2020 NY Slip Op 50120(U) Decided on January 30, 2020 Supreme Court, Suffolk County Berland, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 January 30, 2020
Supreme Court, Suffolk County

Jodi Schubert, Plaintiff(s),

against

Bryan Ciccone, KALIOPE CICCONE, and NORTHEAST EATERIES, INC., Defendant(s).



601567/2019



PLAINTIFF'S ATTORNEYS:

YITZHAK LAW GROUP

17 BARSTOW ROAD

GREAT NECK, NY 11021

DEFENDANT'S ATTORNEYS:

MARKOTSIS & LIEBERMAN, ESQS.

Attorneys for Kalliopi Ciccone

115B BROADWAY, STE 2

HICKSVILLE, NY 11801

DEFENDANT PRO SE:

BRYAN CICCONE
Sanford Neil Berland, J.

Upon the reading and filing of the following papers in this matter: (1) Notice of Motion by defendant Bryan Ciccone, dated April 29, 2019, and supporting papers (seq. #002); (2) Answering Affidavits on behalf of plaintiff and supporting papers (seq. #002); (3) Notice of Motion by plaintiff, dated June 21, 2019, and supporting papers (seq. #003); and (4) Answering Affirmation on behalf of plaintiff (seq. #003); it is

ORDEREDthat the motion (seq. #002) by defendant Bryan Ciccone and the motion (seq. #003) by plaintiff Jodi Schubert are consolidated for purposes of this determination; and it is

ORDERED that the motion (seq. #002) by defendant Bryan Ciccone pursuant to CPLR § 3211, seeking dismissal of the plaintiff's complaint as asserted against him, is denied; and it is further

ORDERED that the motion (#003) by plaintiff for leave to reargue, pursuant to CPLR § 2221(d), the court's decision and order dated May 21, 2019, is denied; and it is further

ORDERED that the time for defendant Bryan Ciccone to serve an answer responsive to the plaintiff's complaint is extended until twenty days after service upon him of notice of entry of the within decision and order.

This is an action claiming breach of contract and unjust enrichment arising from a loan that the plaintiff, Jodi Schubert, alleges she made to defendants through a series of payments that she advanced to defendant Bryan Ciccone between May 19, 2016, and March 20, 2018, totaling $140,525.00. Plaintiff alleges, in her verified complaint, that she made the loan at the request of defendant Bryan Ciccone "for the purpose of assisting him in opening a restaurant in Myrtle Beach, South Carolina"; that she made the loan because she knew Bryan Ciccone; and that the defendants - Bryan Ciccone, his former wife, Kalliopi Ciccone (misnamed "Kaliope" Ciccone in the complaint [FN1] ) and Northeast Eateries, Inc. - "agreed to repay the loan in full, with interest." Plaintiff claims that despite her several demands for repayment, defendants have failed to repay any part of the loan and that, as a result, they are in breach of an oral contract they entered into with her and have been unjustly enriched. Schubert annexes to her complaint copies of bank statements that she alleges show withdrawals from her savings account that correspond to the series of payments that she claims she made to the defendants. In a further submission, an affidavit filed in opposition to defendant Bryan Ciccone's motion to dismiss the complaint as against him, she avers that the enumerated withdrawals from her account "correspond to deposits into Defendants' joint account," with "the transaction for each withdrawal and deposit simultaneously" performed by the same bank teller; that she was "manipulated and coerced" by defendant Bryan Ciccone into giving him money and "scared" by him into thinking that he would kill himself if she did not; and that the defendants promised her that "he" would sign a promissory note for the amounts lent. A portion of a partially completed, and unexecuted, form promissory note, naming Bryan Ciccone as "Borrower," which plaintiff described as "started in[sic] June 30, 2016," is annexed to that affidavit.

By decision and order dated May 21, 2019, the Court granted defendant Kalliopi [*2]Ciccone's motion to dismiss the complaint to the extent asserted against her pursuant to CPLR 3211(a)(7). Plaintiff now moves, pursuant to CPLR 2221(d), to reargue that motion, contending, among other things, that the court, in rendering its earlier decision and order, overlooked that Kalliopi Ciccone had not disputed plaintiff's assertion that the monies she contends constituted a loan were deposited into "Defendants[sic] joint bank account." Separately, defendant Bryan Ciccone moves, pro se, for a order dismissing the complaint as against him pursuant to CPLR § 3211 (a)(5), (a)(7) and (a)(8), on the grounds that all of the claims alleged against him by plaintiff are barred by res judicata and do not state a cause of action against him, and that he was not served with process and, therefore, personal jurisdiction has not been obtained over him. Those motions are decided as follows:

Plaintiff's Motion to renew and reargue

Pursuant to CPLR 2221(d)(2), a motion for leave to reargue must "be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion." A motion for leave to reargue is not designed to provide an unsuccessful party with new opportunities to present arguments different from those originally presented (Amato v Lord & Taylor, Inc., 10 AD3d 374 [2d Dept 2004]).

As noted in summary above, plaintiff's primary contention on her motion to reargue is that the court did not sufficiently appreciate her assertion, not made in her verified complaint but offered both in her April 1, 2019 "Affidavit in Support" [sic] (the "April 1, 2019 Affidavit") and in her attorney's affirmation in opposition to Kalliopi Ciccone's underlying motion to dismiss the claims against her, also dated April 1, 2019, that the monies she allegedly loaned to defendants were "simultaneously" deposited into a bank account that Bryan Ciccone owned jointly with his then wife, Kalliopi Ciccone. What those submissions also make clear, however, is that it is Bryan Ciccone who plaintiff alleges solicited the loan from her (see April 1, 2019 Affidavit, ¶2), to whom she alleges she was "manipulated and coerced into giving" the monies (id., ¶3) and who she was promised "[would] sign a promissory note showing monies were lent" (id.). Moreover, it is evident from plaintiff's affidavit that she had no direct contact with Kalliopi Ciccone until after the transactions she alleges had been completed.

In these circumstances, not only is any claimed breach of an alleged contractual repayment obligation on the part of Kalliopi Ciccone foreclosed by the absence of any writing (see GOL 5-701[a][2]), but so is any alleged claim for unjust enrichment. As to the latter, the "mere holding [of] a joint bank account is insufficient under New York law to give rise to liability for unjust enrichment" (Marini v Adamo, 12 F Supp 3d 549, 551 [EDNY 2014], aff'd, 644 Fed Appx 33 [2d Cir 2016], citing Zell & Ettinger v. Berglas, 261 AD2d 613, 690 N.Y.S.2d 721 [2d Dep't 1999]). Rather, the plaintiff must allege and prove that "'(1) defendant was enriched; (2) the enrichment was at plaintiff's expense; and (3) the circumstances were such that equity and good conscience require [defendant] to make restitution'" (Hughes v Ester C Co., 930 F Supp 2d 439, 471 [EDNY 2013], quoting Intellectual Capital Partner v Institutional Credit Partners LLC, No. 08 Civ 10580(DC), 2009 WL 1974392, at *8 (S.D.NY July 8, 2009). Further, although there are instances in which "unjust enrichment does not require a direct relationship between the parties" (id.), even in those instances, there must be a causal connection between the plaintiff's claimed loss and defendant's actions (see generally Cox v. Microsoft Corp., 8 AD3d 39 (1st Dept 2004) (finding plaintiffs' allegations that defendant's deceptive practices caused them to pay artificially inflated prices for [defendant's] products" sufficient for [*3]purposes of stating a cause of action for unjust enrichment); cf. Kagan v. K-Tel Entertainment, Inc., 172 AD2d 375, 376 [1st Dept 1991] ("The elements of unjust enrichment state that it is not enough that a 'defendant received a benefit from the activities of the plaintiff; if the services were performed at the behest of someone other than the defendant, the plaintiff must look to that person for recovery'"). Thus, plaintiff's assertion that the monies that she claims defendant Bryan Ciccone importuned, induced and coerced her into lending to him, so that he could open a restaurant in Myrtle Beach, were upon withdrawal from her bank account deposited into a bank account Bryan Ciccone owned jointly with his then wife, defendant Kalliopi Ciccone, is insufficient to support a claim for unjust enrichment against Kalliopi Ciccone. Nor does she seek reargument of the court's determination that any breach of contract claim against Kalliopi Ciccone is foreclosed by the applicable statute of frauds, GOL 5-701[a][2] (see Westchester County Health Care Corp. v Ceus, 62 Misc 3d 1072, 1075 [Sup Ct 2019]), as the loan agreement plaintiff allegedly made with Bryan Ciccone was never reduced to writing. Accordingly, plaintiff's motion to reargue defendant Kalliopi Ciccone's motion to dismiss the complaint to the extent asserted against her is denied (see Collins v Stone, 8 AD3d 321, 778 NYS2d 79 [2d Dept 2004]; Hart v City of New York, 5 AD3d 438, 772 NYS2d 574 [2d Dept 2004]).

Defendant Bryan Ciccone's motion to dismiss the complaint

Defendant Bryan Ciccone moves, pro se, pursuant to CPLR 3211[a][1], CPLR 3211[a][5], CPLR 3211[a][7] and CPLR 3211[a][8], to dismiss the complaint to the extent asserted against him. In support of his motion, he invokes principles of claim and issue preclusion and the bar of the statute of frauds and argues that the complaint fails to state a cause of action against him. For the following reason, his motion is denied.

Claim and issue preclusion. Before commencing the current action, Schubert brought a motion for summary judgment in lieu of complaint in this court against the same defendants she has named here. That motion — in Schubert v. Ciccone, et al., Index Number 614661/2018 - was supported by Schubert's affidavit and the affirmation of her attorney, alleged, in substance, that on or about July 1, 2016, plaintiff had loaned the defendants $150,000 [FN2] pursuant to a "verbal promise to pay" and that notwithstanding "several demands for repayment . . . Defendants have failed to repay any of the debt due and owing to Plaintiff." Recovery of principal and interest, as well as costs and expenses, including attorney's fees, was sought. In a decision and order dated November 6, 2018, the court (Martorana, J.) denied Schubert's motion and dismissed the action without prejudice as to all defendants, and without reaching the merits of the motion, on the ground that the court was without subject matter jurisdiction of the matter as Schubert, by effectuating personal service upon Kalliopi Ciccone only twenty-one days before the return date of the motion while demanding that answering papers be served at least seven days prior to the return date of her motion, had afforded Ms. Ciccone was less than the twenty days required by CPLR 320 for responding to process following personal service, a jurisdictional defect (see [*4]Bhanti v Jha, 140 AD3d 685, 686 [2d Dept 2016]; Segway of NY, Inc. v Udit Group, Inc., 120 AD3d 789, 792 [2d Dept2014]).

Defendant Bryan Ciccone, who was served with process in the prior action, now argues, citing CPLR 3211[a][5], that the dismissal of that action bars the current action under "principles of res judicata, collateral estoppel and claim preclusion." Neither claim nor issue preclusion applies, however, in the absence of a conclusive antecedent determination:

The doctrine of res judicata operates to preclude the reconsideration of claims actually litigated and resolved in a prior proceeding, as well as claims for different relief against the same party which arise out of the same factual grouping or transaction, and which should have or could have been resolved in the prior proceeding (see Matter of Kafka v. Meadowlark Gardens Owners, Inc., 34 AD3d 676, 677, 826 N.Y.S.2d 83; Luscher v. Arrua, 21 AD3d 1005, 1007, 801 N.Y.S.2d 379). The doctrine of collateral estoppel bars relitigation of an issue which has necessarily been decided in a prior action and is determinative of the issues disputed in the present action, provided that there was a full and fair opportunity to contest the decision now alleged to be controlling (see Tydings v. Greenfield, Stein & Senior, LLP, 11 NY3d 195, 199, 868 N.Y.S.2d 563, 897 N.E.2d 1044; Buechel v. Bain, 97 NY2d 295, 303—304, 740 N.Y.S.2d 252, 766 N.E.2d 914, cert. denied sub nom. Bain v. Buechel, 535 U.S. 1096, 122 S. Ct. 2293, 152 L. Ed. 2d 1051; York v. Landa, 57 AD3d 980, 870 N.Y.S.2d 459).

(Mahler v Campagna, 60 AD3d 1009, 1011 [2d Dept 2009]. Where, as here, the prior action culminated in a dismissal on grounds unrelated to the merits of the claims or defenses asserted and "without prejudice," neither issue nor claim preclusion is available, and the dismissal cannot be invoked to bar or limit litigation of the same or related claims in a subsequent litigation (see Miller Mfg. Co., Inc. v Zeiler, 45 NY2d 956, 958 [1978] ("It is, of course, axiomatic that a party seeking to assert Res judicata or claim preclusion must show the existence of a prior judgment on the merits . . . . [T]he act of the Judge in crossing out the words 'on the merits' and replacing them with the language 'without prejudice' surely indicates a refusal to rule upon the merits of those causes of action"); Mudry v Giannattasio, 8 AD3d 455, 456 [2d Dept 2004] ("Because the prior determination upon which the order appealed from was predicated did not indicate an intention to dismiss on the merits, the order cannot be deemed a basis for the application of the doctrines of res judicata or collateral estoppel").

Statute of frauds. Ciccone also contends that the claims against him are foreclosed by the statute of frauds, specifically General Obligations Law § 701(a)(1) and (a)(2), because the alleged loan agreement was not reduced to writing [FN3] . Contrary to Ciccone's contention, however, neither provision, certainly at this stage in the proceeding, prevents Schubert from pursuing her claims against him. As a threshold matter, GOL § 701(a)(2) is inapplicable to the claims against Mr. Ciccone, as that provision applies only to "a special promise to answer for the debt, default or miscarriage of another person" and Schubert's allegation is that it was Mr. Ciccone who asked [*5]her for a loan "for the purpose of opening a restaurant in Myrtle Beach," that it was because she "knew [him that] she agreed to lend the money," and that the loan proceeds were paid in the first instance to Mr. Ciccone. Further, although GOL § 701(a)(1) requires a writing if an agreement "[b]y its terms is not to be performed within one year from the making thereof or the performance of which is not to be completed before the end of a lifetime," the test under GOL § 701(a)(1) is not whether performance under the agreement within one year is "unlikely or improbable . . . . The critical test, instead, is whether 'by its terms' the agreement is not to be performed within a year" (Freeedman v Chem. Const. Corp., 43 NY2d 260, 265 [1977] (emphasis added), quoting and citing North Shore Bottling Co. v Schmidt & Sons, 22 NY2d 171, 175-176 [1968], and Nat Nil Serv. Stas. v Wolf, 304 NY 332, 335 [1952]). Thus, in Costantini v Bimco Indus., Inc., 125 AD2d 531, 531 [2d Dept 1986], where the plaintiff's claim was based upon a series of loans to the defendant which had been only partially repaid, the Appellate Division held that "since, by their terms, the loan agreements between the parties were open-ended, with no set time for repayment," the statute of frauds did not render those agreements unenforceable (id., 125 AD2d at 531, citing High v Pritzker, 58 NYS2d 706, 707 [Sup Ct 1945], aff'd, 269 AD 1015 [1st Dept 1945]). As here pertinent, the breach of contract claim alleged by Schubert against Bryan Ciccone is indistinguishable from the plaintiff's claim considered by the Appellate Division in Costantini v Bimco Indus., Inc., supra, and Bryan Ciccone offers nothing in support of his motion to the contrary.

CPLR 3211[a][7]. Mr. Ciccone also argues — seemingly in reference to the same incomplete and unexecuted draft promissory note that was annexed to Schubert's opposition to Kalliopi Ciccone's earlier motion — that Schubert has not established the requisites of an enforceable promissory note or attached such a promissory note or contract to her complaint. "On a motion pursuant to CPLR 3211 (a) (7) to dismiss for failure to state a cause of action, the court must afford the complaint a liberal construction, accept all facts as alleged in the complaint to be true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (see Yu Chen v. Kupoint (USA) Corp., 160 AD3d 787, 788 [2d Dept 2018]; Leon v. Martinez, 84 NY2d 83, 87 [1994]). A motion to dismiss made pursuant to CPLR 3211 (a) (7) must fail if, upon taking all the facts alleged in the complaint as true and according them every possible inference favorable to the plaintiff, "the complaint states in some recognizable form any cause of action known to our law" (Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 38 [2006]). Although Schubert does assert, that she was promised that "he" — presumably referring to Bryan Ciccone — would "sign a promissory note showing monies were lent," and describes the unexecuted promissory note fragment as a draft of the promissory note that was provided to her, her complaint clearly alleges, in its first cause of action, that it is an oral loan agreement that she claims was breached, while her second cause of action alleges a claim for unjust enrichment. Measured by the standard of Yu Chen v. Kupoint (USA), supra, Leon v. Martinez Shaya B. Pac., supra, and Shaya B. Pac., LLC v. Wilson, Elser, Moskowitz, Edelman & Dicker, supra, the complaint amply alleges causes of action seeking recovery for breach of an oral contract and for unjust enrichment against Mr. Ciccone (Thompson Bros. Pile Corp. v Rosenblum, 121 AD3d 672, 673 [2d Dept 2014]("the complaint stated a cause of action to recover damages for breach of contract by alleging the existence of a contract, the plaintiff's performance under the contract, the defendants' breach of the contract, and resulting damages"); Mannino v Passalacqua, 172 AD3d 1190, 1193 [2d Dept 2019], quoting Mandarin Trading [*6]Ltd. v. Wildenstein, 16 NY3d 173, 182 [2011])( "To adequately plead . . . a cause of action [for unjust enrichment], a plaintiff must allege that '(1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered'"); see also Hochheiser v Alin, 59 Misc 3d 1207(A) [Sup Ct 2018]).

CPLR 3211[a][8]. Finally, Bryan Ciccone claims, without more, that he "was never served" — presumably with Schubert's summons and complaint — and that the action should, therefore, be dismissed pursuant to CPLR § 3211[a][8]. The affidavit of service timely filed by plaintiff on February 19, 2019, shows, however, that substituted service of the summons and complaint were made upon Mr. Ciccone pursuant to CPLR 308[4] on February 15 and 16, 2019, following four attempts — on February 1, 6, 8 and 15, 2019 — each at a different time of day, to serve him or a person of suitable age and discretion, at his home in Northport. It is well settled that a "conclusory and unsubstantiated denial of service" is insufficient to "rebut the prima facie proof of proper service set forth in the process server's affidavit of service" (Bd. of Managers of Foundry at Washington Park Condominium v Foundry Dev. Co., Inc., 111 AD3d 776, 777 [2d Dept 2013]).

For all of the foregoing reasons, defendant Bryan Ciccone's motion to dismiss the complaint to the extent asserted against him is denied.

The foregoing constitutes the decision and order of the court.

Dated: ________________________

Riverhead, New York

___________________________________________

HON. SANFORD NEIL BERLAND, A.J.S.C. Footnotes

Footnote 1:For the sake of consistency, the correct spelling of Ms. Ciccone's first name will be used throughout the remainder of this decision and order except when matter is quoted directly from pleadings or other submissions, in which instances the in haec verba spelling, or misspelling, of Ms. Ciccone's name as it appears in the quoted matter will be used.

Footnote 2: Although Schubert averred that she had "delivered" $150,000 to defendants and that they had "accepted same," the list of payments set out in her lawyer's affirmation, based upon withdrawals from Schubert's bank account in the period May, 19, 2016 through March 20, 2018, totals the somewhat smaller amount, $140,525, for which she seeks recovery in the current action.

Footnote 3:As discussed in text, infra, although Mr. Ciccone also argues that Schubert has failed to establish the requisites of an enforceable promissory note or to attach such a promissory note or contract to her complaint, Schubert's claims are not based upon any written instrument but seek recovery for the alleged breach of an oral agreement and for unjust enrichment agreement.