|Etzion v Etzion|
|2013 NY Slip Op 50997(U) [40 Misc 3d 1201(A)]|
|Decided on June 13, 2013|
|Supreme Court, Nassau County|
|Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.|
|This opinion is uncorrected and will not be published in the printed Official Reports.|
Deborah Etzion, Plaintiff
Rafael Etzion, METRO SHIPPING AND WAREHOUSING, INC., METRO K LLC, and VARIETY ACCESSORIES, INC., Defendant.
Defendant ("Husband") moves by Notice of Motion dated December 14, 2012
seeking an Order pursuant to C.P.L.R. §3212 granting Husband's motion for
summary judgment dismissing the First Amended Verified Complaint in its
The parties were married on October 12, 1978 and have four emancipated children. Wife commenced an action for divorce and ancillary relief on June 13, 2002. On March 22, 2005, the parties entered into a "Memorandum Agreement" with respect to Wife's distributive share and a division of all other marital assets in reliance upon a neutral appraiser's report ("Memorandum Agreement"). The terms of their agreement were based upon an understanding that their marital assets were collectively valued at $24,000,000.00. Pursuant to such agreement, Wife agreed to accept $9,700,000.00, title to the marital residence in Great Neck valued at $3,000,000.00, and all of its contents free and clear of any judgments or liens. Husband agreed to accept title to several business corporations including Variety Accessories, Inc., and Metro Shipping and Warehousing Inc., which [*2]held real property at 145 West Street, Brooklyn, New York (the "Subject Property"). The Memorandum Agreement was incorporated into the parties' Stipulation of Settlement, dated June 8, 2005. The Judgment of Divorce, dated August 16, 2005, incorporated but did not merge the terms of the parties' Stipulation of Settlement.
Wife alleges that parties premised their settlement negotiations regarding the Subject Property upon a report prepared by neutral appraiser R.V.A. According to the report, the subject property had a market value of $6,500,000 as of March 27, 2003.
On June 18, 2003, the New York City Department of City Planning announced the possibility of a comprehensive municipal land use and waterfront plan for Greenpoint and Williamsburg. This was a matter of public record, and received coverage in the press throughout the process leading to its approval. As part of this plan, portions of the waterfront area, including the subject property, would be rezoned to allow for residential development.
During settlement negotiations culminating in the binding Memorandum Agreement, the parties agreed that the Subject Property had a value of $7,700,000, based on the 2003 R.V.A. appraisal and adjusted for inflation. On May 11, 2005, seven weeks after the parties agreed to the binding Memorandum Agreement, the City formally adopted the rezoning plan.
On October 6, 2005, Husband entered into a contract for the sale of the Subject Property in the amount of $84,570,000.
Thereafter, Wife commenced a plenary action, and in her First Amended Verified Complaint she alleged that Husband participated in ongoing discussions or negotiations during the time of the negotiation of the terms of the Memorandum Agreement. Specifically, Wife claimed that Husband knew that the Greenpoint-Williamsburg, Brooklyn area where the Subject Property was located was the subject of a re-zoning proposal, and that the Subject Property had increased in value. She alleged that Husband had a fiduciary duty to disclose the alleged increase in value, that she mistakenly relied upon a two year old valuation by the neutral appraiser, and that it was unconscionable for Husband to receive the net proceeds of the sale of the property.
Husband moved to dismiss Wife's complaint and although the Supreme Court
(Marber, J.) denied Husband's motion, the Appellate Division reversed in part and
dismissed those causes of action sounding in unconscionability, prima facie tort,
breach of fiduciary duty, mutual mistake and unilateral mistake. The only allegations and
causes of action that remained were based on fraud for a constructive trust, recision, and
attorney's fees. The Appellate Division found that Wife would have a valid claim if she
could demonstrate that Husband was fraudulent in his representation that were no active
deals or pending negotiations for the sale of the Subject Property as of March 22, 2005,
the date of the Memorandum Agreement. The Appellate Division held that no claim
could be based upon any activity occurring after March 22, 2005.
The Appellate Division further held that:
Under this standard, the complaint in this case is sufficient to state a cause of action to recover damages arising from the defendant's alleged fraudulent misrepresentation that he has not engaged in any active deals or pending negotiations relating to the sale or reorganization of any entity related to Variety. Metro Shipping, which owned and occupied the warehouse property on which Variety conducted its operations, is unquestionably a related entity. [*3]
Since spouses stand in a fiduciary relationship to each other, agreements between them require "the utmost of good faith." Thus, if plaintiff is ultimately able to substantiate her claim that the defendant concealed an existing agreement to sell the warehouse property, she may be able to succeed on the fraudulent misrepresentation cause of action. Moreover, such allegations are sufficient to state a cause of action for reformation and/or rescission of the stipulation of settlement, as well as to impose a constructive trust on the warehouse property or the proceeds received from the sale of that property.
(Etzion v. Etzion, 62 AD3d 646, 880 N.Y.S.2d 79 [2nd Dept. 2009].)
Husband asserts, in support of this instant application, that after five years of discovery, review and production of over 38,000 pages of documents and over 500,000 pages of document fragments, and fourteen depositions served on third party brokers, attorneys and real estate companies in the Greenpoint area, Wife has failed to uncover any evidence giving rise to a question of fact regarding any ongoing negotiations for the sale of the Subject Property prior to March 22, 2005.Wife alleges that she predicates her knowledge of Husband's alleged ongoing negotiations on the affidavits of her private investigator, N.H., as well as an email to Husband from Husband's employee, L.E., which simply states: "Please call [D.H] . . . CityOne[,] RE fax he sent to you today." D.H. is a real estate broker whose number appears in the aforementioned email. At the deposition of D.H., he maintained that he did not remember contacting Husband regarding sale or offers for the Subject Property before March 22, 2005.
Husband claims that full examination of all the discovery documents and depositions
has not revealed any facts or evidence of any pending deals or ongoing negotiations
regarding Subject Property before March 22, 2005.
Summary judgment will only be granted if there are no disputed material facts to warrant a trial. (C.P.L.R. § 3212; see also, Nicholas Di Menna & Sons v. City of New York, 301 NY 118, 121 .)
When adjudicating a motion for summary judgment, it is not the role of the court at that moment to make factual determinations, but rather the court's function in deciding the motion is to ascertain the existence of material issues of fact based upon the examination of the proofs set forth by the parties through affidavits based upon personal knowledge (see Bahar v. Ordover, 92 AD2d 557, 459 N.Y.S.2d 304 [2nd Dept. 1983]).
The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, providing sufficient evidence to demonstrate the absence of any material issues of fact. Failure to make such a showing requires a denial of the motion regardless of the sufficiency of the opposition (Winegrad v. New York Univ. Ned. Center, 64 NY2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 ). Further, when deciding a motion for summary judgment, the court must construe the pleadings in the light most favorable to the non-moving party (Baker v. Briarcliff School Dist., 205 AD2d 652, 613 N.Y.S.2d 660 [2nd Dept. 1994]).
In the instant matter, the Court finds that, after careful consideration of the parties' respective [*4]affidavits, the numerous depositions, and all the relevant discovery materials provided, there exist no material issues of fact such that a trial need be held. Now, with respect to Husband's motion for summary judgment, determined upon each side's submission, it is axiomatic that the matter may be decided summarily without a hearing or trial, if there exist no material issues of fact (Zuckeman v. City of New York, 49 NY2d 557, 562 ). Accordingly, Husband's motion is GRANTED.
Accordingly, it is hereby
ORDERED that the Plaintiff's FIRST AMENDED VERIFIED COMPLAINT is DISMISSED in its entirety.
All matters not decided or requests for relief not granted herein are hereby DENIED.
This constitutes the decision and order of this Court.
Dated:June 13, 2013
Mineola, New York.
HON. EDWARD A. MARON, J.S.C.