VAYNMAN v. KINGS POINT REALTY LLC (2026)

DECISION & ORDER

In an action, inter alia, to set aside an allegedly fraudulent conveyance pursuant to the Debtor and Creditor Law, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Rhonda E. Fischer, J.), dated January 11, 2024.  The order, insofar as appealed from, denied (1) the plaintiffs' motion for leave to reargue their opposition to that branch of the motion of the defendants 3 Kings Point Realty, LLC, Honey Damaghi, H&H Improvements, LLC, Herzel Owadeyah, and Kensington Homes, LLC, which was pursuant to CPLR 3211(a) to dismiss the fourth cause of action insofar as asserted against them, which had been granted in an order of the same court dated April 12, 2023, and (2) the plaintiffs' separate motion pursuant to CPLR 3211(a) to dismiss those defendants' first, second, third, and fifth counterclaims.

ORDERED that the appeal from so much of the order dated January 11, 2024, as denied the plaintiffs' motion for leave to reargue their opposition to that branch of the motion of the defendants 3 Kings Point Realty, LLC, Honey Damaghi, H&H Improvements, LLC, Herzel Owadeyah, and Kensington Homes, LLC, which was pursuant to CPLR 3211(a) to dismiss the fourth cause of action insofar as asserted against them is dismissed;  and it is further,

ORDERED that the order dated January 11, 2024, is modified, on the law, by deleting the provision thereof denying those branches of the plaintiffs' motion which were pursuant to CPLR 3211(a) to dismiss the second, third, and fifth counterclaims of the defendants 3 Kings Point Realty, LLC, Honey Damaghi, H&H Improvements, LLC, Herzel Owadeyah, and Kensington Homes, LLC, and substituting therefor a provision granting those branches of the motion;  as so modified, the order dated January 11, 2024, is affirmed insofar as reviewed;  and it is further,

ORDERED that one bill of costs is awarded to the plaintiffs.

In August 2021, the plaintiffs commenced this action against, among others, the defendants 3 Kings Point Realty, LLC, Honey Damaghi, H&H Improvements, LLC, Herzel Owadeyah, and Kensington Homes, LLC (hereinafter collectively the defendants), to set aside an allegedly fraudulent conveyance pursuant to the Debtor and Creditor Law, arising out of an agreement between the plaintiffs and Damaghi for the purchase of certain residential real property located in Kings Point.  As is relevant to the appeal, the defendants moved, among other things, pursuant to CPLR 3211(a)(1) and (7) to dismiss the fourth cause of action, to set aside an allegedly fraudulent conveyance, insofar as asserted against them.  The plaintiffs opposed.  By order dated April 12, 2023, the Supreme Court, inter alia, granted that branch of the defendants' motion.  Thereafter, the plaintiffs moved for leave to reargue their opposition to that branch of the defendants' prior motion and separately moved pursuant to CPLR 3211(a)(5) and (7) to dismiss the defendants' first, second, third, and fifth counterclaims.  The defendants opposed.  By order dated January 11, 2024 (hereinafter the January 2024 order), the court, among other things, denied the plaintiffs' motion for leave to reargue and the separate motion.  The plaintiffs appeal.

As an initial matter, the plaintiffs' appeal from so much of the January 2024 order as denied the plaintiffs' motion for leave to reargue must be dismissed as no appeal lies from an order denying reargument (see CPLR 2221[d];  Union Mut. Fire Ins. Co. v Trupia, 234 AD3d 1013, 1014;  Goldstein v Khurshid, 215 AD3d 926, 927).

“When deciding a motion to dismiss a complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must accept the facts as alleged in the complaint as true” (Ofman v Richland, 234 AD3d 865, 866 [internal quotation marks omitted];  see Rudovic v Law Off. of Timothy A. Green, 200 AD3d 814, 815).  Giving plaintiff “ ‘the benefit of all favorable inferences which may be drawn from [the] pleading,’ ” this Court determines only whether the alleged facts “ ‘fit within any cognizable legal theory’ ” (Sassi v Mobile Life Support Servs., Inc., 37 NY3d 236, 239, quoting Campaign for Fiscal Equity v State of New York, 86 NY2d 307, 318).  The question is whether the complaint adequately alleged facts giving rise to a cause of action, “not whether [it] properly labeled or artfully stated one” (id. [internal quotation marks omitted] ).

“The gist of the tort [of abuse of process] is the improper use of process after it is issued by an unlawful interference with one's person or property” (Kaufman v Kaufman, 206 AD3d 805, 807 [alteration and internal quotation marks omitted] ).  To state a cause of action to recover damages for abuse of process, a party must allege the existence of “(1) regularly issued process ․ (2) an intent to do harm without excuse or justification, and (3) use of the process in a perverted manner to obtain a collateral objective” (Busiello v Whelan, 240 AD3d 736, 737 [internal quotation marks omitted] ).  “It is irrelevant whether reasonable grounds existed for the use of the process or what the eventual disposition of the action was.  It is the misuse of the legitimate process which is of concern” (Pagliarulo v Pagliarulo, 30 AD2d 840, 841).  For the purposes of an abuse of process action, commencing a civil action by summons and complaint is not process capable of being abused (see Kaufman v Kaufman, 206 AD3d at 807).

Here, the Supreme Court properly denied that branch of the plaintiffs' motion which was to dismiss the defendants' first counterclaim, alleging abuse of process.  Although the allegations regarding the plaintiffs sending a notice and demand letter and commencing the causes of action by summons and complaint is not process capable of being abused (see id.), the defendants' allegations that the plaintiffs' persistent letter writing compelled a village to revoke a certification of occupancy is a process capable of being abused (see Board of Educ. of Farmingdale Union Free School Dist. v Farmingdale Classroom Teachers Assn., Local 1889, AFT AFL–CIO, 38 NY2d 397, 404;  Hauser v Bartow, 273 NY 370, 374).  The defendants also alleged that the plaintiffs abandoned the property, deliberately accumulated property violations, and stopped paying the mortgage and property taxes in an attempt to encumber the property and claim that the property was rendered unmarketable by the defendants and their subcontractors.  Thus, the defendants' allegations under the first counterclaim sufficiently pleaded the elements of abuse of process (see Busiello v Whelan, 240 AD3d at 738).  Moreover, contrary to the plaintiffs' contention, they failed to show that the defendants' counterclaim alleging abuse of process is time-barred (see id. at 737).  Thus, the court properly denied that branch of the plaintiffs' motion to the dismiss the defendants' first counterclaim.

However, the Supreme Court should have granted that branch of the plaintiffs' motion which was to dismiss the second counterclaim.  The elements of a cause of action alleging defamation are “(1) a false statement ․ (2) published without privilege or authorization to a third party, (3) amounting to fault as judged by, at a minimum, a negligence standard, and (4) either causing special [damages] or constituting defamation per se” (Fernandes v Fernandes, 235 AD3d 724, 725 [internal quotation marks omitted] ).  “A statement is defamatory per se if it ․ tends to injure [the defendant] in her or his trade business or profession” (Laguerre v Maurice, 192 AD3d 44, 50).

Pursuant to CPLR 3016(a), “[i]n an action for libel or slander, the particular words complained of shall be set forth in the complaint, but their application to the plaintiff may be stated generally.”  The complaint must also set forth the alleged time, place, and manner of the false statement, as well as specifying to whom the statement was made (see Sternberg v Wiederman, 225 AD3d 820, 822).

Here, the defendants' second counterclaim failed to comply with the specificity requirements for pleading a cause of action alleging defamation per se, as it does not “provide the time, place and manner of the purported defamation” (Buxbaum v Castro, 104 AD3d 895, 895).  Moreover, the defendants' second counterclaim failed to allege to whom the statements were allegedly published (see Kimso Apts., LLC v Rivera, 180 AD3d 1033, 1035).  Accordingly, the Supreme Court should have granted that branch of the plaintiffs' motion which was to dismiss the defendants' second counterclaim, alleging defamation per se.

“To set forth a [counterclaim] sounding in tortious interference with business relations, a [defendant] is required to plead that the [plaintiff] interfered with the [defendant's] business relationships either with the sole purpose of harming the [defendant] or by means that were unlawful or improper” (Tri–Star Light.  Corp. v Goldstein, 151 AD3d 1102, 1106 [internal quotation marks omitted] ).  “This standard is met where the interference with prospective business relations was accomplished by wrongful means or where the offending party acted for the sole purpose of harming the other party” (Stuart's, LLC v Edelman, 196 AD3d 711, 713 [internal quotation marks omitted] ).  The wrongful means supporting a cause of action alleging intentional interference with a business relationship includes acts that constitute a crime or independent tort or other egregious wrongdoing (see Lynch Dev. Assoc., Inc. v Johnson, 219 AD3d 1328, 1330).

On a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), “bare legal conclusions are not presumed to be true and are not accorded every favorable inference” (Grant v DiFeo, 165 AD3d 897, 899).

Here, the defendants did not allege any facts about how the plaintiffs, or what specific actions they took, interfered with the business relationships beyond listing the plaintiffs' allegations (see Worldcare Intl., Inc. v Kay, 119 AD3d 554, 557).  Nor did the defendants allege any facts that directly describe or support an inference that the plaintiffs acted solely motivated by malice (see Tri–Star Light.  Corp. v Goldstein, 151 AD3d at 1107).  Accordingly, the Supreme Court should have granted that branch of the plaintiffs' motion pursuant to CPLR 3211(a)(7) which was to dismiss the defendants' third counterclaim, alleging tortious interference with business relations.

“[C]ommon-law indemnification ․ involves an attempt to shift the entire loss from one who is compelled to pay for a loss, without regard to his [or her] own fault, to another person who should more properly bear responsibility for that loss” (25–86 41st St., LLC v Chong, 235 AD3d 813, 815 [internal quotation marks omitted];  see Board of Mgrs. of the 125 N. 10th Condominium v 125North10, LLC, 150 AD3d 1063, 1064).  “The key element of a common-law cause of action for indemnification is not a duty running from the indemnitor to the injured party, but rather is a separate duty owed the indemnitee by the indemnitor” (Santoro v Poughkeepsie Crossings, LLC, 180 AD3d 12, 16 [alteration and internal quotation marks omitted] ).

Here, the defendants failed to plead facts sufficient to state a counterclaim for common-law indemnification.  The defendants did not allege that the plaintiffs owed a duty to them, “an essential element of a cause of action sounding in common-law indemnification” (Razdolskaya v Lyubarsky, 160 AD3d 994, 997).  Accordingly, the Supreme Court should have granted that branch of the plaintiffs' motion which was to dismiss the defendants' fifth counterclaim, for common-law indemnification.

DUFFY, J.P., WOOTEN, LANDICINO and QUIRK, JJ., concur.