SEGAL v. COOPER (2008)

Order, Supreme Court, New York County (Milton A. Tingling, J.), entered November 23, 2007, which denied defendants' motion to dismiss the amended complaint, unanimously modified, on the law, to strike plaintiff's demands for punitive damages, and otherwise affirmed, without costs.

 Accepting as true the facts as alleged in the complaint, according plaintiff the benefit of every favorable inference, and determining only whether the facts as alleged fit within any cognizable legal theory (Sokoloff v. Harriman Estates Dev. Corp., 96 N.Y.2d 409, 414, 729 N.Y.S.2d 425, 754 N.E.2d 184 [2001] ), we find that plaintiff's causes of action were adequately alleged.   As to fraud, whether plaintiff's reliance upon defendants' alleged misrepresentations was reasonable is a factual issue not to be resolved on a motion directed at the pleadings (see generally Brunetti v. Musallam, 11 A.D.3d 280, 783 N.Y.S.2d 347 [2004] ).   The adequacy of the breach of contract cause of action is gleaned from the complaint as a whole (see Dulberg v. Mock, 1 N.Y.2d 54, 56, 150 N.Y.S.2d 180, 133 N.E.2d 695 [1956] ).   Plaintiff's allegations that, on behalf of the business venture he entered into with the individual defendants to market certain properties, he actively marketed the properties, and commissions were generated and paid to defendants, who ultimately diverted them, depriving him of his share of the commissions, adequately state a cause of action for unjust enrichment (see Wiener v. Lazard Freres & Co., 241 A.D.2d 114, 119-121, 672 N.Y.S.2d 8 [1998] ).   Moreover, contrary to defendants' contention, that cause of action need not be dismissed merely because it “contradicts the underlying theory” of the breach of contract cause of action (see Cohn v. Lionel Corp., 21 N.Y.2d 559, 563, 289 N.Y.S.2d 404, 236 N.E.2d 634 [1968];  Limited v. McCrory Corp., 169 A.D.2d 605, 607, 564 N.Y.S.2d 751 [1991];  CPLR 3014).   As to the unjust enrichment cause of action asserted derivatively, plaintiff alleged with sufficient particularity that a majority of the controlling members of the limited liability company were interested in the challenged transactions and that therefore a demand to initiate a lawsuit would have been futile (see Marx v. Akers, 88 N.Y.2d 189, 198, 644 N.Y.S.2d 121, 666 N.E.2d 1034 [1986] ).

 Plaintiff's demand for punitive damages should have been struck since his primary claim is contract-based and there is no allegation that defendants' conduct was directed at the public generally (see Giblin v. Murphy, 73 N.Y.2d 769, 536 N.Y.S.2d 54, 532 N.E.2d 1282 [1988] ).   Nor do the allegations indicate that defendants' conduct in the transactions involved a high degree of moral turpitude (see Gamiel v. Curtis & Riess-Curtis, P.C., 16 A.D.3d 140, 791 N.Y.S.2d 78 [2005] ).

We have reviewed defendants' remaining arguments and find them without merit.