TAB EQUITY GROUP LLC v. LLC (2026)

DECISION & ORDER

In an action to recover damages for breach of contract and tortious interference with contract, the plaintiff appeals from an order of the Supreme Court, Nassau County (David P. Sullivan, J.), entered June 24, 2022.  The order, insofar as appealed from, granted that branch of the motion of the defendants Toorak Capital Partners, LLC, and Special Service America, LLC, which was pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against them and denied the plaintiff's cross-motion pursuant to CPLR 3025(b) for leave to serve an amended complaint.

ORDERED that the order is affirmed insofar as appealed from, with costs.

In November 2018, the plaintiff, TAB Equity Group, LLC, by its principal and sole managing member, Rafael Tabibov, entered into a construction loan agreement with the defendant Sharestates Investment DACL, LLC (hereinafter Sharestates), and executed a note in the sum of $277,000 (hereinafter the TAB note), which was secured by a mortgage (hereinafter the TAB mortgage and, together with the TAB note, the TAB loan documents) on certain commercial property located in Hempstead (hereinafter the subject property).  The TAB note provided that the $277,000 loan would be advanced in an initial disbursement of $192,000, followed by four disbursements of $21,250 each, totaling $85,000 (hereinafter the reserve funds), made upon the plaintiff's request to Sharestates for the disbursement of such funds.  Tabibov individually guaranteed repayment of the TAB loan.

In June 2020, the plaintiff, by Tabivov, and Tabibov, individually, executed an escrow agreement whereby the plaintiff and Tabibov agreed that “the full amount of the approved draws per the Schedule A below is to be held in escrow and will be used to pay any outstanding unpaid interest for the loans originated by Sharestates listed in Schedule B.” The “draws” listed under Schedule A included only the $85,000 in reserve funds, which were secured by the subject property.  However, the loans listed in Schedule B of the escrow agreement included the TAB loan, as well as three additional loans given to other entities formed by Tabibov, which loans were secured by other properties and individually guaranteed by Tabibov.

In October 2020, the plaintiff entered into a contract to sell the subject property.  In December 2020, the defendant Toorak Capital Partners, LLC (hereinafter Toorak), as Sharestates' assignee, commenced an action against the plaintiff and Tabibov, among others, to foreclose the TAB mortgage.  Immediately following the commencement of that action, Toorak assigned the TAB loan documents to the defendant Special Service America, LLC (hereinafter Special Service and, together with Toorak, the Toorak defendants).

In May 2021, at the plaintiff's request, Special Service issued a payoff letter to the plaintiff that quoted a total amount of $405,445.86 to satisfy the TAB loan.  By letter dated July 13, 2021, the plaintiff's counsel notified Special Service that the total payment amount quoted in the May 2021 payoff letter was in error, contending that only the initial $192,000 disbursement was actually advanced to the plaintiff, while the $85,000 in reserve funds afforded under the TAB note was never advanced to the plaintiff.  The plaintiff's counsel further advised Special Service that the subject property was in contract to be sold and demanded that Special Service issue a corrected payoff letter within three days of receipt of counsel's letter.

In August 2021, the plaintiff commenced this action against the Toorak defendants and Sharestates, asserting causes of action alleging breach of contract and tortious interference with contract.  The plaintiff alleged, inter alia, that the Toorak defendants breached the TAB loan documents and violated Real Property Law § 274–a by failing to issue a payoff letter containing the correct total amount due and that Toorak and Sharestates breached the TAB loan documents by disbursing the $85,000 in reserve funds to an unknown entity, despite the plaintiff never having requested such disbursements.

The Toorak defendants moved, among other things, pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against them.  The plaintiff opposed the motion and simultaneously attempted to file an amended complaint, without leave of court.  Thereafter, the plaintiff cross-moved pursuant to CPLR 3025(b) for leave to serve an amended complaint.  In an order entered June 24, 2022, the Supreme Court, inter alia, granted that branch of the Toorak defendants' motion which was pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against them and denied the plaintiff's cross-motion.  The plaintiff appeals.

“ ‘[O]n a motion pursuant to CPLR 3211(a)(7) to dismiss for failure to state a cause of action, the court must accept the facts alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory’ ” (Kaur v Lema, 187 AD3d 870, 872 [internal quotation marks omitted], quoting Doe v Ascend Charter Schs., 181 AD3d 648, 649;  see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326;  Shah v Exxis, Inc., 138 AD3d 970, 971).  “ ‘A court is ․ permitted to consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7)’ ” (Kaur v Lema, 187 AD3d at 872, quoting Doe v Ascend Charter Schs., 181 AD3d at 650;  see Sokol v Leader, 74 AD3d 1180, 1181).  Where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, “the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and, unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate” (Kaur v Lema, 187 AD3d at 872;  see Guggenheimer v Ginzburg, 43 NY2d 268, 274–275).

Here, the complaint and Tabibov's affidavit submitted in opposition to the Toorak defendants' motion failed to identify which provision of the TAB loan documents the Toorak defendants allegedly breached based on their failure to issue a correct payoff letter or based on the disbursement of the $85,000 in reserve funds in accordance with the escrow agreement signed by the plaintiff and Tabibov.  Thus, the Supreme Court properly granted that branch of the Toorak defendants' motion which was pursuant to CPLR 3211(a) to dismiss the breach of contract causes of action insofar as asserted against them (see Kaur v Lema, 187 AD3d at 872).

Moreover, there is no record evidence to support a finding that the Toorak defendants procured the purchasers' breach of the contract of sale of the subject property or that the purchasers or the plaintiff breached the contract of sale.  Rather, the record demonstrates that because the plaintiff could not perform under the contract of sale, the purchasers demanded a return of their down payment.  Accordingly, the Supreme Court properly granted that branch of the Toorak defendants' motion which was pursuant to CPLR 3211(a) to dismiss the tortious interference with contract cause of action insofar as asserted against them (see Gutierrez v McGrath Mgt. Servs., Inc., 152 AD3d 498, 500).

The parties' remaining contentions either are without merit or need not be reached in light of our determination.

GENOVESI, J.P., WARHIT, LOVE and QUIRK, JJ., concur.