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BELLEROSE DENTAL, P.C., Plaintiff, v. LIBERTY UNIVERSAL CORP., a/k/a Liberty Universal Inc., Roman Matatov, Atlantis Dentistry, P.C., Julia Abend and Katya Tonkonogy, Defendants.
The following papers numbered 1 to 15read on this motion by Liberty Universal Corp., a/k/a Liberty Universal Inc. (“Liberty”), Roman Matatov and Katia Tonkonogy to dismiss the complaint on the ground that plaintiff is perpetrating a fraud upon the court; to strike the complaint pursuant to CPLR 3126 , on the ground that plaintiff failed to comply with discovery demands; for summary judgment dismissing the action insofar as asserted against Matatov and Tonkonogy; and to dismiss the allegations of fraud and conversion; and cross motion by Atlantis Dentistry, P.C. (“Atlantis”), and Julia Abend to dismiss the complaint on the same grounds, adopting the arguments and evidence proffered by movants.
Notice of Motion - Affidavits - Exhibits 1 - 5
Notice of Cross Motion - Affidavits - Exhibits 6 - 8
Answering Affidavits - Exhibits 9 - 12
Reply Affidavits 13-15
Upon the foregoing papers it is ordered that the motion and cross motion are determined as follows:
Plaintiff in this breach of contract action seeks damages based upon an alleged lockout of plaintiff from its commercial dental practice. The complaint alleges that Title Agency Headquarters, LLC, the owner of the property located at 102-30/102-32 Jamaica Avenue, Richmond Hill, New York 11418 (“the premises”), leased the premises to defendant Liberty Universal Inc. (“Liberty”). Liberty, as landlord, thereupon leased the premises to plaintiff, as tenant, for a term of ten years commencing on March 1, 2013, for use as a dental care and services facility. Plaintiff installed various equipment and trade fixtures at an alleged cost of approximately $ 150,000.00. The complaint alleges that on June 1, 2014, defendants Liberty and its owner Matatov and Tonkonogy (an agent of Liberty), unlawfully evicted plaintiff by changing the locks to the premises without giving plaintiff the new keys. The complaint further alleges that Liberty then gave possession to defendant Atlantis Dentistry P.C. (“Atlantis”), and Abend; and that Atlantis and Abend were aware of plaintiff's lease and conspired and colluded with co-defendants to divest plaintiff of possession of the premises and its equipment and property.
The first cause of action of the complaint alleges that by leasing the premise to Atlantis and Abend, defendants Liberty, Matatov and Tonkonogy breached the terms of the Lease (breach of contract). In the second cause of action, plaintiff alleges that defendants breached the covenant of quiet enjoyment. The third cause of action alleges unlawful eviction. The fourth cause of action against Liberty, Matatov and Tonkonogy alleges fraud. The fifth cause of action against Liberty, Matatov and Tonkonogy is for conversion of plaintiff's security deposit. The sixth cause of action against all defendant alleges conversion of plaintiff's equipment and property. The seventh cause of action against all defendants seeks a declaratory judgment declaring that plaintiff is entitled to retake possession of the premises and its equipment and other property and to be restored to possession of the premises.
Notably, the record indicates that there has been extensive motion practice by the parties to date. Defendants now move and cross move, respectively, to dismiss the complaint on the grounds of fraud upon the court, and for failure to comply with discovery demands pursuant to CPLR 3126, and for dismissal of the fraud and conversion causes of action. Defendants Roman Matatov and Katia Tonkonogy also move to dismiss the complaint, insofar as asserted against them. Atlantis and Abend cross move to dismiss the complaint on the same grounds. Plaintiff opposes the motion and cross motion.
The branch of the motion which is to strike the complaint for failure to comply with discovery, is denied. The drastic remedy of striking a pleading should not be imposed unless the failure to comply with discovery demands or orders was clearly willful and contumacious (see Arpino v. F.J.F. & Sons Elec. Co., Inc., 102 AD3d 201, 210 [2d Dept 2012]; Zakhidov v. Boulevard Tenants Corp., 96 AD3d 737, 739 [2d Dept 2012]; Commisso v. Orshan, 85 AD3d 845 [2d Dept 2011] ). The willful and contumacious character of a party's conduct may be inferred from the party's repeated failure to comply with court-ordered discovery, and the absence of any reasonable excuse for those failures, or a failure to comply with court-ordered discovery over an extended period of time (see Tos v. Jackson Hgts. Care Ctr., LLC, 91 AD3d 943, 944 [2d Dept 2012]; Mangru v. Schering Corp., 90 AD3d 621 [2d Dept 2011]; Matone v. Sycamore Realty Corp., 87 AD3d 1113, 1114 [2d Dept 2011] ).
Here, it appears that plaintiff has substantially complied with the defendant's notices for discovery, and made a good-faith effort to locate certain items requested by the defendants. The plaintiff substantially, albeit tardily, complied with discovery demands (see Mironer v. City of New York, 79 AD3d 1106, 1108 ; ACME ANC Corp. v. Read, 55 AD3d 854, 855 [2d Dept 2008]; Resnick v. Schwarzkopf, 41 AD3d 573 [2d Dept 2007] ). Thus, under the circumstances of this case, there was no clear showing that the plaintiff failed to wilfully and contumaciously failed to comply with discovery demands (see New York Timber, LLC v. Seneca Companies, 133 AD3d 576, 577-78 [2d Dept 2015]; Palmieri v. Piano Exch., Inc., 124 AD3d 611, 612 [2d Dept 2015]; Delarosa v. Besser Co., 86 AD3d 588, 589 [2d Dept 2011]; Prappas v. Papadatos, 38 AD3d 871, 872—873 [2d Dept 2007] ).
The branch of the motion which is to dismiss the complaint on the ground that plaintiff has committed fraud on the court by proffering an altered and or forged contract, is also denied. “[A] court has inherent power to address actions which are meant to undermine the truth-seeking function of the judicial system and place in question the integrity of the courts and our system of justice” (CDR Créances S.A.S. v. Cohen, 23 NY3d 307, 318  ). “Fraud on the court involves wilful conduct that is deceitful and obstructionistic, which injects misrepresentations and false information into the judicial process ‘so serious that it undermines ․ ․the integrity of the proceeding’ ” (id. at 318, quoting Baba—Ali v. State of New York, 19 NY3d 627, 634 ; Bessa v. Anflo Indus., Inc., 148 AD3d 974, 976 [2d Dept 2017] ). “[I]n order to demonstrate fraud on the court, the nonoffending party must establish by clear and convincing evidence that the offending ‘party has acted knowingly in an attempt to hinder the fact finder's fair adjudication of the case and his adversary's defense of the action’ ” (CDR Créances S.A.S. v. Cohen, 23 NY3d at 320, quoting McMunn v.Memorial Sloan—Kettering Cancer Ctr., 191 F. Supp. 2d 440, 445 [S.D.NY 2002] ). “A court must be persuaded that the fraudulent conduct, which may include proof of fabrication of evidence, perjury, and falsification of documents concerns ‘issues that are central to the truth-finding process’ ” (CDR Créances S.A.S. v. Cohen, 23 NY3d at 320—321, quoting McMunn v. Memorial Sloan—Kettering Cancer Ctr., 191 F. Supp.2d at 445).
A review of the record indicates that defendants' claims of fraud on the court are unsubstantiated. Defendants have not met their burden of presenting clear and convincing evidence that plaintiff submitted an altered contract in support of its claims. Uvaydov submitted an affidavit in opposition to the instant motion wherein he swears that the May 2, 2013 Lease in his possession, signed by defendant Matatov, contains original signatures and that the said Lease will be produced at trial. Furthermore, Uvaydov also submits that his alleged signature on the purported May 1, 2012 Lease Rider, is a forgery and this contention is corroborated by handwriting expert Laura Mancebo. Significantly, even assuming arguendo, that there was a duly executed lease between the parties in 2012, such lease would be expressly superceded by the March 1, 2013 Lease which provides: “[t]his Agreement terminates and supercedes all prior understandings or agreement on the subject matter hereof. This Agreement may only be modified by a further writing that it duly executed by both parties.”
As to defendants' claim that the invoices are “forged”, Uvaydov also swears in his annexed affidavit that all documents exchanged as discovery, including invoices, are true and unaltered copies of the documents in his possession. The court notes that any perceived discrepancies between the documentation of damages, “[t]he credibility of the witnesses, the truthfulness and accuracy of the testimony, whether contradicted or not, and the significance of weaknesses and discrepancies are all issues for the trier of facts” (Pedone v. B & B Equip. Co., Inc., 239 AD2d 397, 399 [2d Dept 1997]; Sorokin v. Food Fair Stores, 51 AD2d 592, 593 [2d Dept 1976] ).
The branches of the motion and cross motion which seek to dismiss the complaint, insofar as asserted against Matatov and Tonkonogy, are granted. Officers, directors or employees of a corporation do not become liable to one who has contracted with the corporation for inducing the corporation to breach its contract merely because they have made decisions and taken actions that resulted in the corporation's breaching its contract (Citicorp Retail Services, Inc. v. Wellington Mercantile Services, Inc., 90 AD2d 532, 532-33 [2d Dept 1982] ). The rule in New York is that “ ‘[A] corporate officer who is charged with inducing the breach of a contract between the corporation and a third party is immune from liability if it appears that he is acting in good faith as an officer ․ [and did not commit] independent torts or predatory acts directed at another’ ” (Id., quoting Murtha v. Yonkers Child Care Assn., 45 NY2d 913, 915  ). Although plaintiff has alleged specific wrongful acts on the part of the Matatov and Tonkonogy, it has not sufficiently alleged that their acts were taken outside the scope of their employment or that they personally profited from their acts. To hold officers or employees liable for causing their corporation to breach its contract, it is not sufficient merely to allege, in conclusory form, that they acted for personal profit or committed independently tortious acts (see Di Nardo v. L & W Ind. Park of Buffalo, 74 AD2d 736 [4th Dept 1980]; Roberts v. Finkel, 46 AD2d 878 [1st Dept 1974]; Rothschild v. World-Wide Autos. Corp., 24 AD2d 861 [1st Dept 1965], affd 18 NY2d 982  ).
The branch of the motion and cross motion which seek to dismiss the fraud cause of action, is granted. “A cause of action alleging fraud does not lie where the only fraud claim relates to a breach of contract. A present intent to deceive must be alleged and a mere misrepresentation of an intention to perform under the contract is insufficient to allege fraud” (J.M. Bldrs. & Assoc., Inc. v. Lindner, 67 AD3d 738, 741 [2d Dept 2009] [internal quotation marks omitted]; see also Financial Structures Ltd. v. UBS AG, 77 AD3d 417, 419 [1st Dept 2010] ). Plaintiff's fraud claims fails because it merely alleges that defendants made representations that induced plaintiff to enter into the Lease; that said representations were false as defendants did not intend to comport their conduct with same, and that they misrepresented their intention to perform under the contract (see Jeffers v. Am. Univ. of Antigua, 125 AD3d 440, 442-43 [1st Dept 2015] ).
The branches of the motion and cross motion which seek to dismiss the conversion causes of action are denied. As the allegations supporting the breach of contract cause of action are distinct from those giving rise to the conversion causes of action, the claims alleging breach of contract and conversion are not duplicative (see New York Med. Coll. v. Histogenetics, Inc., 6 AD3d 410, 411 [2d Dept 2004]; Bender Ins. Agency v.Treiber Ins. Agency, 283 AD2d 448, 450 [2d Dept 2001]; cf. Bettan v. Geico Gen. Ins. Co., 296 AD2d 469, 470 [2d Dept 2002]; Mecca v. Shang, 258 AD2d 569, 570 [2d Dept 1999] ).
The branches of the motion and cross motion which seek to strike the complaint for failure to comply with discovery, are denied.
The branches of the motion and cross motion which seek to dismiss the complaint on the ground that plaintiff has committed fraud on the court by proffering an altered and or forged contract, are denied.
The branches of the motion and cross motion which seek to dismiss the complaint, insofar as asserted against Matatov and Tonkonogy, are granted.
The branch of the motion and cross motion which seek to dismiss the fraud cause of action, is granted.
The branches of the motion and cross motion which seek to dismiss the conversion cause of action are denied.
Allan B. Weiss, J.
Response sent, thank you
Docket No: 15248/14
Decided: March 07, 2019
Court: Supreme Court, Queens County, New York.
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