University Veterinary Specialists, LLC v Four Dimensional Digital Imaging LLC
Annotate this CaseDecided on July 23, 2020
Supreme Court, New York County
University Veterinary Specialists, LLC, Plaintiff,
against
Four Dimensional Digital Imaging LLC D/B/A 4DDI Equine, George Papaioannou, Defendant.
650104/2017
Plaintiff:
Meyner and Landis LLP
One Gateway, Suite 2500, Newark, NJ 07102
By: Catherine M Pastrikos Esq.
Defendants:
The Law Office of Aaron M. Schlossberg, Esq, PLLC
243 W 60th St. Unit 8c, New York, NY 10023
By: Aaron Morris Schlossberg Esq.
Robert R. Reed, J.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 9, 10, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34 were read on this motion for PARTIAL SUMMARY JUDGMENT.
Plaintiff moves, pursuant to CPLR 3213,[FN1] for partial summary judgment on its unjust enrichment, money had and received, and conversion causes of action, and for an order dismissing defendants' affirmative defenses and counterclaims. Defendants oppose the motion, and cross-move, pursuant to CPLR 3211 and CPLR 3212, for an order granting summary judgment on defendants' counterclaims and dismissing the complaint in its entirety against defendants.
BACKGROUND
On or about January 6, 2017, plaintiff University Veterinary Specialists, LLC (UVS), [*2]commenced this action against defendants Four Dimensional Digital Imaging, LLC d/b/a 4DDI Equine (4DDI), and George Papaioannou, founder and owner of 4DDI, essentially to recover $200,000, representing the amount of a down payment for the purchase of a CT scanner. The complaint asserts seven causes of action against defendants: (1) violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (first cause of action); (2) violation of section 349(a) of the New York General Business Law (second cause of action); (3) fraud (third cause of action); (4) fraud in the inducement (fourth cause of action); (5) unjust enrichment (fifth cause of action); (6) money had and received (sixth cause of action); and (7) conversion (seventh cause of action).
The facts, as alleged in the complaint, are that, on or about June 24, 2016, Dr. Apryle Horbal (Horbal), founder of plaintiff, observed a demonstration of defendants' Equimagine 2 CT scanner. Horbal and Papaionnou thereafter entered into negotiations for the purchase of defendants' CT scanner. Horbal agreed to purchase the CT scanner from defendants. Papaionnou advised plaintiff that he required a $200,000 deposit and full payment upon installation of the CT scanner. On or about July 6, 2016, plaintiff tendered a $200,000 check to Papaionnou. Plaintiff further alleges that defendants subsequently sent two purchase orders and that each purchase order failed to properly reflect Horbal's understanding of the negotiated terms. The parties did not enter into a written agreement and defendants failed to deliver the CT scanner to plaintiff by the date specified by plaintiff. On or about on November 22, 2016, plaintiff sent a letter demanding the return of its deposit. Defendants have not returned plaintiff's money (NY St Cts Elec Filing [NYSCEF] Doc No. 1).
Plaintiff now moves for partial summary judgment in its favor on its fifth, sixth, and seventh causes of action. Plaintiff also moves to dismiss twenty-eight (28) of defendants' thirty-eight (38) affirmative defenses and to dismiss defendants three counterclaims: (1) promissory estoppel, (2) breach of contract and (3) breach of an oral contract. Defendants cross-move for summary judgment, pursuant to CPLR 3211 and CPLR 3212, to dismiss all the causes of action against defendants, and to grant judgment in favor of defendants on their counterclaims.
DISCUSSION
A summary judgment movant must make a prima facie showing of entitlement to judgment as a matter of law and of the absence of any material issue of fact (Winegrad v New York Univ. Med. Center, 64 NY2d 851, 853 [1985]). Once the movant makes this showing, the burden shifts to the party opposing the motion to prove the existence of material issues of fact requiring a trial (Pemberton v New York City Tr. Auth., 304 AD2d 340, 342 [1st Dept 2003]).
In support of its motion for summary judgment, plaintiff has provided a sworn affidavit from Horbal attesting to negotiations with defendants. Horbal avers that plaintiff paid Papaioannou a deposit in the amount of $200,000 for the purchase of an Equimagine 2 CT scanner. Horbal further avers that the parties never executed a contract, purchase order, or any other written agreement (NYSCEF Doc. No. 13).
Defendants' overarching contention is that they relied on plaintiff's promise to purchase the CT scanner to their detriment. 4DDI, defendants assert, expended time, money, effort, and resources to customize the CT scanner for plaintiff's unique specifications. In support of this contention, defendants submit the affidavits of Papaioannou, Michael Kohlios (robotics engineer with 4DDI), Fernando Viveros (senior robotics control engineer with 4DDI), and Christos Mitrogianis (imaging engineer with 4DDI) (see NYSCEF Doc. Nos. 25, 17, 18, and 19 respectively).
The court finds that plaintiff has failed to demonstrate prima facie entitlement to summary judgment on its fifth cause of action for unjust enrichment, sixth cause of action for money had and received, and its seventh cause of action for conversion. Plaintiff fails to submit any documentary evidence to meet its burden for summary judgment. Plaintiff relies solely on the affidavit of Horbal, which does not adequately address the particular facts and circumstances around the tender of the $200,000. Horbal's affidavit is insufficient to meet the high burden for summary judgment.
The affidavits submitted by defendants likewise fail to demonstrate prima facie entitlement to summary judgment in their favor. Issues of fact exist as to whether the parties had a binding oral contract. Overall, there is a lack of clarity of the specific terms the parties assert they agreed upon. Where questions of fact and credibility exist with respect to the existence of a binding oral agreement between parties, summary judgment in favor of either side is inappropriate (see Sabre Intl. Sec, Ltd. v Vulcan Capital Mgt., Inc., 95 AD3d 434, 436 [2012]). The affidavits submitted by Horbal and Papaionnou create questions of fact and credibility with respect to the negotiations between plaintiff and defendants.
Defendants further contend that Papaionnou may not be held liable for plaintiff's injuries because there is no evidence that establishes that he acted outside his capacity as president of 4DDI. Papaionnou may be held individually liable if as a corporate officer he participated in the commission of the corporation's tort (see Board of Mgrs. of the S. Star v WSA Equities, LLC, 140 AD3d 405, 405 [1st Dep't 2016]). Defendants have the burden to establish a defense to this basis for liability (see Peguero v 601 Realty Corp., 58 AD3d 556, 559 [1st Dep't 2009]). Defendants do not meet this burden merely by claiming that Papaionnou is not liable because the negotiations were between plaintiff and the corporate defendant.
Accordingly, plaintiff's motion for summary judgment and defendants' cross-motion for summary judgment must both be denied.
Plaintiff's Motion to Dismiss Defendants' Affirmative Defenses
CPLR 3211(b) provides that "[a] party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit." "On a motion to dismiss affirmative defenses pursuant to CPLR 3211 (b), the plaintiff bears the burden of demonstrating that the defenses are without merit as a matter of law" (534 E. 11th St. Hous. Dev. Fund Corp. v Hendrick, 90 AD3d 541, 541-42 [1st Dept 2011]). As with a motion to dismiss pursuant to CPLR 3211 (a), the pleadings are to be liberally construed and the defendant is entitled to the benefit of every favorable inference (id., at 542). Where there are question of fact requiring a trial as to a defense, the defense should not be dismissed (id.). The dismissal of an affirmative defense is warranted, however, where only conclusions of law are pleaded with no supporting facts (see Robbins v Growney, 229 AD2d 356, 358 [1st Dept 1996]).
The court has determined that there are issues of fact requiring a trial. Plaintiff has failed to set forth any ground for dismissal of the affirmative defenses. Plaintiff has failed to establish that defendants' affirmative defenses, though numerous, are without merit as a matter of law. Accordingly, plaintiff's motion to dismiss defendants' affirmative defenses is denied.
Plaintiff's Motion to Dismiss Defendants' Counterclaims
"On a motion to dismiss pursuant to CPLR 3211, the court accepts as true the facts as alleged in the complaint and submissions in opposition to the motion, accords the plaintiff the benefit of every possible favorable inference, and determines only whether the facts as alleged fit within any cognizable legal theory" (Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414 [*3][2001]).
A. Promissory Estoppel
Defendants' first counterclaim seeks damages for promissory estoppel against plaintiff. Defendants argue that the parties entered into an agreement in which plaintiff promised to purchase defendants' CT scanner. Defendants allege that they suffered injuries as a result of relying on plaintiff's promise. Plaintiff argues that the statute of frauds bars recovery under this cause of action. To state a viable cause of action for promissory estoppel, the following elements must be established: (1) an oral promise that is sufficiently clear and unambiguous; (2) reasonable reliance on the promise by a party; and (3) injury caused by the reliance (NY City Health & Hosps. Corp. v. St. Barnabas Hosp., 10 AD3d 489, 491 [1st Dept 2004]). Defendants allege enough to state a cause of action for promissory estoppel sufficient to withstand a motion to dismiss.
Accordingly, the portion of plaintiff's motion that seeks to dismiss the first counterclaim is denied.
B. Breach of Contract
Defendants' second counterclaim seeks damages for breach of contract. It is beyond dispute that the parties did not execute a written contract. Defendants' argument that their own unsigned purchase orders constituted a contract is unavailing. To the extent defendants' breach of contract language in the second counterclaim is intended broadly to encompass oral commitments, it is duplicative of the third cause of action—and is therefore unnecessary. Accordingly, plaintiff's motion to dismiss defendants' second counterclaim is granted.
C. Breach of an Oral Contract
Defendants' third counterclaim seeks damages for breach of an oral contract. Defendants contend that plaintiff and defendants entered into an oral agreement to purchase machines and possible investment opportunities in 4DDI. Plaintiff argues that the alleged dispute is over the purchase of a single CT scanner, and, thus, is governed by the statute of frauds.
The court, as discussed above, has already denied the summary judgment motions by plaintiff and defendants—finding issues of fact regarding the specific terms of any agreement. Here, on plaintiff's motion to dismiss defendants' counterclaims, the court determines that defendants have met the minimum pleading standard necessary to state a cause of action for breach of an oral agreement. The court has considered the parties' remaining arguments and finds them to be unavailing.
Accordingly, it is hereby
ORDERED that plaintiff's motion for summary judgment is denied; and it is further
ORDERED that plaintiff's motion to dismiss defendants' affirmative defenses is denied; and it is further
ORDERED that plaintiff's motion to dismiss defendants' counterclaims is granted only to the extent of dismissing the second counterclaim for breach of contract; and it is further
ORDERED that the motion to dismiss the counterclaims is otherwise denied; and it is further
ORDERED that the Clerk is respectfully directed to mark his records to reflect the said dismissal of the second counterclaim; and it is further
ORDERED that defendants' cross-motion for summary judgment in their favor on their counterclaims is denied; and it is further
ORDERED that defendants' cross-motion to dismiss the complaint is denied; and it is [*4]further
ORDERED that the parties are directed to appear for a preliminary conference, via telephone, on September 15, 2020 at 10:00 a.m.
Dated: July 23, 2020
Robert R. Reed, J.S.C. Footnotes
Footnote 1:The court will deem this as a motion for relief pursuant to CPLR 3212 (see CPLR 2001).
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