M.S., Plaintiff v. M.S., L.S., and M.S. Insurance Agency Corp., Third-Party Defendants (2025)

PROCEDURAL HISTORY

On August 3, 2021, L.B. ("Plaintiff") commenced this commercial action against M.S. ("Husband", individually), L.S. ("Wife", individually), and M.S. Insurance Agency Corp. ("MSIAC", individually) ("Defendants", collectively) by filing a summons and verified complaint in New York State Supreme Court, Kings County. Wife interposed a verified answer that asserted cross-claims against Husband and MSIAC, seeking a determination that any damages sustained by Plaintiff were caused solely or primarily by Husband's conduct. Husband subsequently filed a verified answer to both Plaintiff's complaint and Wife's cross-claims. Thereafter, the commercial action was transferred to New York State Supreme Court, Richmond County, and consolidated with Husband's pending divorce action against Wife. In addition, a third-party intervenor action was brought by Plaintiff against Defendants.

Plaintiff asserts three causes of action in the complaint: (1) breach of the creditor agreement; (2) equitable rescission; and (3) unjust enrichment.

The consolidated action was transferred to the undersigned after the filing of the Note of Issue. The claims in the instant commercial action were tried before this Court over the course of July 26, 2024, August 12, 2024, August 13, 2024, and August 15, 2024. The matrimonial and third-party intervenor actions were not subject to this trial.

At trial, Plaintiff testified on her own behalf and called Gary M. Trop, Esq., as a witness. Plaintiff also submitted numerous documents into evidence (Plaintiff's Exhibits 1—9, 13—16, with subparts). Husband testified on his own behalf, but did not call any witnesses or introduce any evidence. Wife did not testify, call any witnesses, or introduce any evidence.

During the trial, counsel for Husband made, and subsequently renewed, a motion for a directed verdict in his client's favor. Similarly, Wife's counsel made a motion for a directed verdict in her client's favor. The Court denied both motions.

Following the conclusion of the trial, counsel for Plaintiff and Husband each submitted written summations. Wife's counsel did not submit a summation. Due to a miscommunication regarding the receipt of trial transcripts and the commencement of the 60-day period for summation submissions, Plaintiff's counsel submitted a summation before Husband's counsel began drafting his own. The Court permitted Husband's counsel to file his summation and, to avoid any prejudice to Plaintiff, afforded Plaintiff's counsel the opportunity to file a supplemental summation, if necessary. Upon the filing of Husband's post-trial summation, Plaintiff waived the right to file a supplemental summation.

BACKGROUND

Plaintiff is Wife's mother and, accordingly, Husband's mother-in-law. In the summer of 2017, Plaintiff was contemplating retirement and engaged in discussions with Husband regarding the sale of her book of business ("the Allstate Book"), or, more precisely, the transfer of her financial interest in commissions generated by her portfolio of insurance policies sold to clients. At that time, Husband had been engaged in the insurance business for over a decade and had formed MSIAC the previous year to conduct his business as an exclusive Allstate agent.

In July 2017, Plaintiff and Husband, as the sole owner of MSIAC, executed Allstate's "Agency Purchase Approval Request" ("the Allstate APAR"), pursuant to which Plaintiff sought Allstate's approval to sell an economic interest in her Allstate Book to MSIAC, effective October 1, 2017. The Allstate APAR required submission of supplemental documents, including a "Buyer's Agency Business Plan" and a "Written Sale Agreement between Buyer and Seller". Plaintiff and Husband both signed the Allstate APAR. Wife was not mentioned within the document, nor did she sign it.

On September 29, 2017, Plaintiff and Husband, acting on behalf of MSIAC, executed two documents entitled "Granting of Security Interest in the Economic Interest in an R3001 Contract" and "Security Agreement in Economic Interest" ("the Allstate Security Agreements", collectively). These agreements reflect that a security interest was granted in connection with the transaction involving the transfer of the Allstate Book to Husband. The same two agreements were executed again by Plaintiff and Husband on October 2, 2017, one day after the effective sale date. No testimony or expert explanation was offered at trial regarding the purpose or standard use of these agreements, or the reason for their re-execution.

Also on September 29, 2017, Plaintiff and Husband each signed a document entitled "[L.B.'s] Book of Business Sales Agreement" ("the Sales Agreement"), whereby Plaintiff agreed to sell her interest in her Allstate Book, to be effectuated on October 1, 2017, to Husband, doing business as MSIAC. The Sales Agreement specifies that "[a]ll the financial details have been discussed between buyer and seller, and in a contract under a separate document."

That same day, Husband executed a promissory note ("the Note") on behalf of MSIAC memorializing the financial terms of a loan, in the amount of $500,000.00, representing the purchase price of the interest in the relevant portion of the Allstate Book. Under the Note, Husband agreed to pay Plaintiff 36 monthly payments of $5,000.00, and a balloon payment totaling $346,117.11 upon the 37th month. The installment payments were to commence on January 1, 2018, and conclude on January 1, 2021. The Note specifies the interest rate as two percent (2%). There are no terms addressing default or late payment included in the Note.

The interest in the Allstate Book was assigned to Husband as of October 1, 2017, and Husband began receiving commissions from that interest in December of 2017. The parties do not dispute that Allstate approved the transaction, as evidenced by Husband's receipt of commissions.

Plaintiff assigned to Husband only an interest in a portion of the Allstate Book. Plaintiff also assigned an interest in the Allstate Book to her other son-in-law.

In or about January 2018, Plaintiff retained counsel, Gary M. Trop, Esq., to assist in preparing formal contracts for the assignments of the Allstate Book to Husband and her other son-in-law. Mr. Trop drafted separate contracts for each transaction. Following email correspondence with Husband regarding the prospective purchase agreement, Mr. Trop emailed Husband a draft of the proposed Asset Purchase Agreement ("the APA") on January 30, 2018. At this point, Husband, as MSIAC, had already paid his first $5,000.00 installment under the Note and was receiving commissions pursuant to the Sales Agreement.

On January 31, 2018, Mr. Trop emailed Husband a revised version of the APA, indicating that he had included the name of Husband's company, MSIAC, as per Husband's feedback.

Approximately one month later, Mr. Trop emailed Husband a mortgage amortization schedule detailing the loan terms corresponding to the transaction. Husband responded that the agreed term for the monthly installments of $5,000.00 was 36 months, rather than 24 months. After seeking clarification from Plaintiff, Mr. Trop revised the amortization schedule to reflect 36 monthly payments. Plaintiff was copied on virtually all email exchanges between Mr. Trop and Husband.

On August 5, 2020, Husband commenced the divorce action against Wife.

Mr. Trop never received a signed APA from either Husband or Plaintiff, and it is undisputed that Husband did not sign the APA.

It is also undisputed that, by January 31, 2021, Husband had completed all 36 installment payments of $5,000.00 per month as promised within the Note. In fact, he made 37 payments, though neither party explained the reason for the extra payment.

It is undisputed that Husband did not make the balloon payment in the amount of $346,117.11 upon the 37th month, in February of 2021, as promised within the Note. In early March of 2021, he informed Plaintiff that he had been approved for a loan, which would close on April 15, 2021, and that his attorney would handle the balloon payment. Through the final date of trial, Husband had not completed the final balloon payment to Plaintiff. The parties dispute the reasons for this failure to pay. Husband represents that, since January of 2022, when he secured an alternative source of credit, he has been ready to remit the final lump sum payment, and that sufficient funds from that loan have been set aside and are currently available to make that payment.

It is undisputed that Wife's name or signature does not appear and is not referenced in any documents, including but not limited to the Allstate APAR, the Allstate Security Agreements, the Sales Agreement, or the Note, concerning the transfer of the economic interest in the Allstate Book. Furthermore, it is undisputed that Wife has never been an owner of MSIAC, and has never been paid a salary from, received a distribution from, been listed on the tax returns for, or been a signatory on the accounts of MSIAC. No evidence at trial contradicts these facts.

Although the instant action ostensibly arises from Husband's failure to remit the lump sum balloon payment to Plaintiff, a review of the record reveals that the principal issue in dispute is whether Wife is properly deemed a co-purchaser of the interest in the Allstate Book. Accordingly, as a threshold matter, the Court must determine which, if any, of the agreements pertaining to the assignment of the Allstate Book constitute enforceable contracts.

The parties have entered into a signed written stipulation waiving any right to arbitration under the Allstate Security Agreements or any related agreements. As a result, all claims and defenses in this action are properly before the Court for adjudication on the merits.

DISCUSSION

I. Sales Agreement and Note

At trial, Plaintiff testified that the Sales Agreement and Note were akin to letters of intent, rather than binding contracts to assign an economic interest in the Allstate Book to Husband. Plaintiff claims that Husband understood that this transaction required a formal and comprehensive contract, and that the Sales Agreement and Note, which she characterizes as lacking sufficient detail and being bare in material terms, would not suffice. To support her claim, Plaintiff points to emails in which Husband asked Mr. Trop about the APA and negotiated specific terms. Plaintiff further testified that she approached her assignment of a portion of the Allstate Book to her other son-in-law in the same way, and had Mr. Trop draft asset purchase agreements for both transactions.

In opposition, Husband testified that the Sales Agreement, Note, and Allstate documents together constituted an enforceable contract for his purchase of an economic interest in the Allstate Book. At trial, he testified that the Sales Agreement's provision stating that "[a]ll financial details have been discussed between buyer and seller, and in a contract under a separate document," referred to the Note, wherein the details of the loan and payment terms were set forth. Husband argues that the interest in the Allstate Book was transferred to his company, MSIAC, on October 1, 2017, and that he began receiving commissions from that book of business in December of 2017. Moreover, he contends that he never signed the APA and, nevertheless, Plaintiff accepted all 36 monthly payments from him without objection over the course of three years after the transaction.

To form a binding contract, there must be a meeting of the minds, such that there is a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms (Kamel v Ahgelian, 210 AD3d 973 [2d Dept 2022]). In determining whether the parties intended to enter into a contract, and the nature of the contract's material terms, the Court looks to the objective manifestations of intent as gathered from the parties' expressed words and deeds (Brown Bros. Elec. Contractors, Inc. v Beam Const. Corp., 41 NY2d 397, 399 [1977]). The Court must not place disproportionate emphasis on any single act, phrase, or other expression, but rather must consider the totality of the circumstances, the situation of the parties, and the objectives they were striving to attain (id. at 399-400). Here, Plaintiff and Husband took deliberate steps over the course of two months, executing numerous documents for Allstate to effectuate Husband's purchase of an economic interest in the Allstate Book, including a Sales Agreement and Note that were reasonably specific as to material terms (see Emigrant Bank v UBS Real Estate Sec., Inc., 49 AD3d 382, 384 [1st Dept 2008]). The Note set forth the purchase price, duration of the loan, payment schedule, and interest rate, and the parties' conduct, including Plaintiff's acceptance of all payments, confirms mutual assent.

Accordingly, the Court finds that the Sales Agreement and Note executed by Plaintiff and Husband, together with the Allstate APAR and Allstate Security Agreements, constitute a binding contract for Husband's purchase of an economic interest in the Allstate Book.

Plaintiff and Husband's intention to be bound by the Sales Agreement and Note is evidenced by the language and terms therein, which control over any unexpressed or subjective intention (seeFour Seasons Hotels Ltd. v Vinnik, 127 AD2d 310, 317 [1st Dept 1987]; see also Mencher v Weiss, 306 NY 1 [1953]; see also21 NY Jur 2d Contracts § 29). In signing the Sales Agreement, Plaintiff and Husband represented and affirmed that "all the financial details have been discussed between buyer and seller and in a contract under a separate document." As aforementioned, those financial details were set forth in the Note. There is no mention in the Sales Agreement or any executed document relevant to Husband's purchase of Plaintiff's Allstate Book of a prospective agreement. Therefore, Plaintiff's subjective understanding as to the legal effect of the Sales Agreement and Note is irrelevant.

Even if the Sales Agreement left certain material terms to a future agreement, that would not render it invalid (seeFour Seasons Hotels, 127 AD2d at 317). The Sales Agreement and Note, together with the Allstate APAR and Allstate Security Agreements, contain all of the essential terms of the contract, and the fact that the parties may have intended to negotiate a more comprehensive agreement in the future does not negate the legal effect of the agreements already executed.

Upon the Court's review of the Sales Agreement, Note, and signed Allstate documents, there is no express or implied indication that Plaintiff did not intend to be bound to the assignment of the Allstate Book to Husband (see Stonehill Capital Mgt., LLC v Bank of the W., 28 NY3d 439 [2016]). Plaintiff, who worked in the insurance industry for decades and built a successful business, did not expressly reserve the right not to be bound, nor did Plaintiff condition Husband's purchase on the execution of a comprehensive contract (see id.;Bed Bath & Beyond Inc. v IBEX Const., LLC, 52 AD3d 413, 414 [1st Dept 2008]). At trial, Plaintiff could not provide a substantive explanation for why she executed agreements to effectuate Husband's purchase of the Allstate Book before executing the comprehensive contract she intended to govern the transaction.

The Allstate APAR executed by Plaintiff and Husband contains a term, "Part IV: Written Sale Agreement between Buyer and Seller," stating:

"Seller and Buyer understand and agree that the Company's consent to the purchase of the agency is subject to the Company obtaining a written and signed sale agreement to show a sale has been completed or will take effect in the future without any contingencies other than payment for consideration."

For the Court to adopt Plaintiff's argument that the Sales Agreement was not final or binding, but simply a manifestation of intent conditioned on the execution of a future contract, would be in direct contravention of the terms of the Allstate APAR and Allstate's internal approval process for effectuating such transactions (see Stonehill Capital Mgt., LLC, 28 NY3d at 452). Ultimately, the representations made by Plaintiff and Husband in the numerous executed documents submitted to Allstate, including the Sales Agreement, Note, Allstate APAR, and Allstate Security Agreements, caused Allstate to approve and effectuate Husband's purchase of the Allstate Book. Moreover, any later agreement to be executed between Plaintiff and Husband would necessarily be limited to terms substantially the same as those in the aforementioned agreements as required by Allstate, whereupon they approved the transaction (see Emigrant Bank, 49 AD3d at 383).

Upon review of the trial record, the Court finds that Plaintiff manifested her intent to be bound by the Sales Agreement and Note by assigning her Allstate Book without first securing a comprehensive contract, negotiating such a contract months later, and accepting 36 monthly payments from Husband under the Note (see T. Moriarty & Son, Inc. v Case Contr. Ltd., 287 AD2d 390 [1st Dept 2001]).

It is important to note that the Sales Agreement and Note were executed by Plaintiff and Husband on the same day. It is well established that contemporaneous written agreements related to the same subject matter, such as Husband's purchase of the Allstate Book in this case, must be read together as one agreement (see Nau v Vulcan Rail & Constr. Co., 286 NY 188 [1941]). Accordingly, the Court finds that Plaintiff and Husband set forth the material terms of the Allstate Book purchase to be effective on October 1, 2017, and intended to be bound by those terms. Notably, Husband commenced monthly payments pursuant to those terms, and Plaintiff accepted them, before a proposed comprehensive contract was formally presented.

II. The Asset Purchase Agreement

Plaintiff contends that the APA constitutes a valid and enforceable contract, notwithstanding the absence of Husband's signature. Plaintiff asserts that Husband understood and agreed that his purchase of Plaintiff's Allstate Book would be memorialized in a comprehensive contract after the transaction was effectuated. In support, Plaintiff points to email correspondence in which Husband inquired about and negotiated terms of the APA with Plaintiff's counsel. Plaintiff maintains that Husband's conduct induced her reliance, as evidenced by her acceptance of 36 monthly payments under the Note. She further argues that, although Husband did not sign the APA, he performed in accordance with its terms by remitting monthly payments, and that she did not realize the APA remained unsigned until 2021.

In opposition, Husband maintains that his performance was at all times governed by the executed Sales Agreement and Note, and that the only material distinction between those documents and the draft APA, as submitted to the Court at trial, was the proposed inclusion of Wife as a co-purchaser of the Allstate Book. Husband denies ever agreeing to, or representing that he would agree to, the addition of Wife as a co-purchaser or as an owner of MSIAC. He contends that the APA fails under the Statute of Frauds, as it could not be performed within one year and was never executed by him. Husband asserts that his payment of 36 monthly installments was made pursuant to the express terms of the Note and Sales Agreement, not the draft APA. He further notes that Plaintiff never directly requested that he sign the APA, nor followed up regarding its execution, but instead continued to accept monthly payments for three years. Husband also points to the testimony of Plaintiff and her counsel, Mr. Trop, that Plaintiff herself never submitted a signed contract to Mr. Trop even though the APA was signed by Plaintiff and Wife.

New York's Statute of Frauds provides that an agreement is unenforceable unless memorialized in a signed writing if, by its terms, it cannot be performed within one year (General Obligations Law § 5-701 [a]; see D & N Boening, Inc. v Kirsch Beverages, Inc., 63 NY2d 449, 454 [1984]). The APA, which expressly specifies a payment term extending over three years, falls squarely within this statute.

The Statute of Frauds admits two narrow exceptions: partial performance that is "unequivocally referable" to the agreement and inconsistent with any other explanation (Pinkava v Yurkiw, 64 AD3d 690, 692 [2d Dept 2009]; 45 Nostrand Retail Ltd. v745 Jeffco Corp., 50 AD3d 768, 769 [2d Dept 2008]), and equitable estoppel, which applies only where enforcing the statute would inflict "unconscionable injury" due to detrimental reliance on a clear promise (In re Estate of Hennel, 29 NY3d 487 [2017]; American Bartenders School, Inc. v 105 Madison Co., 59 NY2d 716, 718 [1983]). The Court finds that neither exception applies here. The partial performance exception is expressly available under General Obligations Law § 5-703 (4), pertaining to contracts concerning real property, but not to contracts governed by General Obligations Law § 5-701 (a). The Court cannot read a partial performance exception meant for real property contracts into other statutes (see Gural v Drasner, 114 AD3d 25, 29-32 [1st Dept 2013]).

Even assuming, arguendo, that partial performance could apply, Plaintiff's claim would fail. The economic interest in the Allstate Book was transferred to MSIAC on October 1, 2017, and Husband began receiving commissions in December of 2017, before the APA was first drafted in January 2018. Husband's 36 monthly payments under the Note, and Plaintiff's acceptance thereof, are referable solely to the executed Sales Agreement and Note, not the unexecuted APA. Partial performance cannot salvage an agreement where the conduct at issue aligns entirely with prior valid contracts (see Messner Vetere Berger McNamee Schmetterer Euro RSCG Inc. v Aegis Group PLC, 93 NY2d 229 [1999]).

The Court finds that equitable estoppel is likewise inapplicable. Plaintiff cannot demonstrate a clear promise by Husband to execute the APA, nor any detrimental reliance on such a promise. The transaction was completed in 2017, with Allstate's approval, through the Sales Agreement, Note, and related documents executed that year. Plaintiff accepted payments for three years without demanding execution of the APA, and the economic benefit of the Allstate Book had already vested in Husband. Furthermore, no unconscionable injury arises from the APA's absence, as the parties' rights and obligations were adequately defined by the 2017 agreements, which constitute the binding contract for the sale (seeHennel, 29 NY3d at 921).

The Court rejects Plaintiff's claim that Husband's conduct led her to rely on a promise to execute a comprehensive contract, assume he signed the APA without verification, and accept 36 monthly payments over three years. A mere "agreement to agree" is unenforceable without objective evidence of mutual assent to all material terms (Kolchins v Evolution Markets, Inc., 31 NY3d 100, 106 [2018]; DCR Mortg. VI Sub I, LLC v Peoples United Fin., Inc., 148 AD3d 986, 987-88 [2d Dept 2017]).

Upon review of the record, the Court finds that Plaintiff and Husband were, at most, negotiating the APA. Husband never signed the agreement, and Plaintiff does not assert that Husband ever agreed to, or even implied he would agree to, adding Wife as a co-purchaser of the Allstate Book. As previously discussed, Wife's name does not appear in the Sales Agreement, Note, or any documents or forms submitted by Plaintiff and Husband to Allstate to effectuate the transfer of the Allstate Book.

Although Wife signed an Allstate Promissory Note and Subordination Agreement in 2018, these documents were not part of Husband's purchase of the Allstate Book. They were submitted to refinance a 2015 Allstate loan on which Husband and Wife were co-borrowers. Wife did not testify or submit exhibits, leaving the trial record limited to Plaintiff's and Husband's testimony on this issue. The record does not show that Wife held a current or active insurance license at the relevant time, and Husband credibly testified that Allstate would not have approved the transaction with Wife as a co-purchaser.

The Court also finds that Plaintiff's testimony and conduct following the sale of the Allstate Book further demonstrate her reliance on the executed Sales Agreement and Note, rather than the unsigned APA, to govern the transaction. At trial, Plaintiff admitted that she never saw an asset purchase agreement executed by Husband, nor inquired about its status prior to 2021. She further acknowledged that she never asked Husband to sign the APA. Plaintiff testified that she was not concerned by this omission because her attorney was handling the contract, and because she knew she had a document signed by Husband reflecting the amount he owed her, which she kept in a folder in her office (Tr. 8/13 at 9-10).

The only document signed by Husband detailing his financial obligations to Plaintiff for the purchase was the Note. Husband paid all monthly installments under the Note, in full, for 36 months, which likely explains why Plaintiff did not follow up with her attorney or Husband regarding the APA for nearly three years, despite never receiving confirmation of its execution and knowing that she herself never submitted an executed APA to her attorney. The Court finds that Plaintiff relied on the Sales Agreement and Note to govern the sale of the Allstate Book, and did not look to the APA.

For all the foregoing reasons, the Court finds that the APA is not a valid, binding, or enforceable contract.

III. Breach of Creditor Agreement

Plaintiff alleges that Defendants breached their payment obligations by failing to pay the balloon payment under the APA. The Court has already found the APA unenforceable under the Statute of Frauds and lacking mutual assent. As previously discussed herein, the only binding contracts governing the transaction are the Sales Agreement and the Note.

Under New York law, a promissory note is enforceable and valid if it meets the statutory requirements of Section 3-104 of the Uniform Commercial Code, which mandates only: (1) the maker's signature, (2) an unconditional promise to pay a sum certain, (3) payment on demand or at a definite time, and (4) payment to order or bearer. In this case, the Note satisfies all statutory criteria. It was signed by Husband, contains an unconditional promise to pay $500,000.00 plus 2% interest, specifies a definite payment schedule, and is payable to Plaintiff. The absence of default or acceleration terms does not affect its enforceability.

At trial, Plaintiff acknowledged that the Note required only the borrower's signature to be valid. The evidence establishes that MSIAC made all required monthly payments under the Note, except for one instance where a check was returned and promptly replaced. Plaintiff accepted all payments without objection, and there is no evidence in the record that she ever sought to impose late fees. The sole outstanding obligation is the balloon payment which Husband, as he credibly testified, stands ready to pay.

The delay in payment stems from Plaintiff's refusal to accept the balloon payment after Husband secured the funds to satisfy the obligation. However, under the clear terms of the Note and Sales Agreement, Husband's obligation was simply to pay the balloon payment when it became due. There is no provision requiring Plaintiff to take any action or provide any cooperation to facilitate Husband's payment, including executing documents for Allstate or any other third-party lender.

Therefore, any delay attributable to Plaintiff's refusal to execute Allstate's loan documentation in 2021 does not excuse Husband's obligation to pay interest under the Note through January 2022, when he ultimately obtained alternative funds. The Note does not condition payment or the accrual of interest on Plaintiff's cooperation with any lender, and nothing in the agreement shifts the risk of delay in payment to Plaintiff.

The Court finds Husband's testimony credible that, upon securing a loan from the United States Small Business Administration ("the SBA Loan") in January of 2022, Plaintiff refused to accept payment despite his readiness to perform. The Note remains valid and enforceable, and Husband's obligation to pay the balloon payment of $346,117.11, plus 2% interest from the maturity date of February 1, 2021, to the date of securing the SBA Loan on January 31, 2022, is unaffected by Plaintiff's disavowal of the agreement at trial.

The Court finds that no statutory pre-judgment interest is warranted after January 31, 2022. Plaintiff's refusal to accept payment, despite Husband's tender of the funds, constitutes bad faith that inequitably prolonged the accrual of interest and violated the covenant of good faith and fair dealing implied in every contract (see 511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 153 [2002] [implied covenant prohibits conduct depriving a party of contractual benefits]; Dalton v Educ. Testing Serv., 87 NY2d 384, 389 [1995]; Mut. Life Ins. Co. of NY v Tailored Woman, Inc., 309 NY 248, 254 [1955]; Kirke La Shelle Co. v Armstrong Co., 263 NY 79, 87 [1933]).

IV. Rescission

The Court finds that Plaintiff's cause of action for rescission is without merit. The APA, having never been executed or mutually assented to, is not a contract and therefore cannot be rescinded as a matter of law. With respect to the Sales Agreement and Note, which the Court already determined are the only valid and enforceable agreements in the record, Plaintiff has failed to demonstrate any recognized basis for rescission under New York law.

At trial, Plaintiff admitted her claims stemmed from unilateral mistakes, including signing the 2017 Sales Agreement and Allstate documents without securing a comprehensive contract or confirming Husband's execution of the APA. When asked why she did not have her attorney review the Sales Agreement and Allstate transfer documents prior to signing them, Plaintiff testified, "[b]ecause I'm stupid" (Tr. 8/12/24 at 101).

She further acknowledged that she exercised poor judgment in executing these documents before negotiating a comprehensive contract, explaining:

"I was dealing with my kids. I wasn't dealing with strangers. I trust my kids with my life and through them I trusted my in-laws with my life. Did I do a bad judgment? Yes." (Tr. 8/12/24 at 16).

Plaintiff also admitted to assuming Wife's involvement in the transaction without verifying it with Husband or Allstate, and to assuming that Wife would be involved with any new entity formed by Husband under which he would run the Allstate Book once purchased.

These admissions confirm that Plaintiff's errors were unilateral and rooted in misplaced trust at worst, not in any fraud, misrepresentation, or mutual mistake. Unilateral mistake, absent fraud or other equitable grounds, does not justify rescission (seeAlmap Holdings, Inc. v Bank Leumi Tr. Co. of New York, 196 AD2d 518 [2d Dept 1993]). Furthermore, rescission is an equitable remedy unavailable where an adequate remedy at law exists. Here, an adequate remedy lies in Husband's ability to pay the balloon payment (see Rudman v Cowles Communications, Inc., 30 NY2d 1, 13 [1972]). Restoring the status quo would require Plaintiff to return $180,000.00 in payments, and Husband to relinquish eight years of commissions, which is neither practicable nor equitable (see id. at 13; Adrian Family Partners I, LP v ExxonMobil Corp., 61 AD3d 901, 902 [2d Dept 2009]).

V. Unjust Enrichment

Plaintiff's unjust enrichment claim is precluded by the existence of an enforceable agreement between the parties, through the Sales Agreement and the Note. Unjust enrichment is a quasi-contractual remedy available only in the absence of an express agreement (Corsello v Verizon NY Inc., 18 NY3d 777, 790[2012]; Clark-Fitzpatrick, Inc. v Long Is. RR Co., 70 NY2d 382, 388 [1987]). Here, the Sales Agreement and the Note definitively outline the parties' rights and obligations, precluding any claim in quasi-contract.

Even if no contract existed, Plaintiff cannot satisfy the elements of unjust enrichment. To prevail, Plaintiff must prove: (1) Husband was enriched, (2) that enrichment was at Plaintiff's expense, and (3) it is against equity and good conscience to permit Husband to retain the benefit (see Can Man Carting, LLC v Spiezio, 165 AD3d 1029, 1031 [2d Dept 2018]). The record demonstrates that Plaintiff, a sophisticated party in the insurance business, transferred the Allstate Book to Husband's company, MSIAC, with full knowledge of the terms and received $180,000.00 in payments under the Note. Husband stands ready to pay the balloon payment. Plaintiff acknowledged that her decisions were based on familial trust rather than business formalities or contractual safeguards.

Equity does not require restitution where, as here, Plaintiff received substantial consideration, Husband fulfilled nearly all obligations under the agreement, and any alleged shortfall in price or contractual protection resulted from Plaintiff's own choices and assumptions, not from any overreaching or inequitable conduct by Husband (see Can Man Carting, LLC, 165 AD3d at 1031). Plaintiff's claim that she sold the book for less than market value is unsupported by the record, and does not constitute unjust enrichment under New York law.

CONCLUSION

As set forth by the Court in this decision after trial, Plaintiff's Complaint is hereby DISMISSED. Accordingly, as Wife's cross-claims against Husband and MSIAC are all based on Plaintiff's causes of action, those cross-claims are also DISMISSED.

The APA is unenforceable, and the Sales Agreement and Note govern the transaction. Defendant remains obligated to pay the balloon payment under the Note, with 2% interest accruing from February 1, 2021 to January 31, 2022. The Court further finds that Wife was not a co-purchaser or party to the transaction, and no relief is warranted against her.

The foregoing constitutes the decision of the Court after trial. In the event that an application was made during or before trial, and not specifically addressed herein, or any motion was filed and not specifically decided, that application or motion is hereby denied.

Dated: May 16, 2025

Staten Island, New York

Paul Marrone, Jr., J.