This is a proceeding pursuant to SCPA 2103 to discover and deliver property. The petitioners are Stephen Saft, Lynn Grossman and Alfred LaRosa, co-executors of the estate of Thomas Elmezzi. The respondent is Enrique Molina. In Decision No. 470, dated September 30, 2008, the court addressed jurisdiction and forum issues directing an evidentiary hearing respecting whether there were sufficient minimum contacts to confer personal jurisdiction over Molina and declining to address the forum non conveniens issue pending resolution of the factual issues regarding personal jurisdiction. Following an April 17, 2009 evidentiary hearing, Molina elected to withdraw his defenses of lack of personal jurisdiction and forum non conveniens, requesting that the court rule on the other two defenses addressed in his motion to dismiss, i.e., statute of frauds and statute of limitations. In Decision No. 371, dated June 25, 2009, the court concluded that the petition adequately set forth a cause of action for monies had and received, imposition of a constructive trust, unjust enrichment, breach of fiduciary duty and an accounting. The motion to dismiss on grounds of statute of frauds and statute of limitations was denied.

In joint Decision Nos. 26520 and 26521, the court addressed disclosure issues wherein the parties requested protective orders. Of note is the court's refusal to permit petitioners to obtain discovery concerning Molina assets other than the so-called Mexican Bottling Plant Assets.

All parties have now cross- moved for summary judgment.

The subject motions are quite extensive. The primary thrust of Molina's motions is that the ownership of the Mexican Bottling Companies and Pepsi-Gemex is governed by Mexican law and that under Mexican law the purported nominee relationship between Molina and the decedent was void and unenforceable. This argument raises a series of issues. They include whether the ownership of the stock in admittedly Mexican corporations is a predicate issue inasmuch as the executors' petition is addressed to the proceeds from the sale of the purported nominee stock; whether the validity and/or enforceability of the purported nominee relationship is governed by the law of Mexico or the law of New York under applicable choice of law criteria; if Mexican law applies, does such law require the dismissal of the Executors' claims against the sales proceeds; and whether this "illegality" defense is properly before the court at all.

Molina's motion reprises his statute of frauds claim under former New York Uniform Commercial Code � 8-319[a] previously addressed by the court in its Decision No. 371 in the context of Molina's motion to dismiss under CPLR 3211 where that provision was found inapplicable to the case. Molina also argues that the executors' submissions do not make out a prima facie case for monies had and received, imposition of a constructive trust, unjust enrichment, breach of fiduciary duty and/or an accounting.

The executors seek partial summary judgment as to the existence of the nominee relationship entitling them to recover from Molina 15% of the proceeds Molina received from the sale of his ownership interests in Pepsi Gemex. More specifically, petitioners seek a holding: [a] that the decedent held a 15% ownership interest in Molina's interest in Pepsi-Gemex S.A. de C.V. ("Pepsi-Gemex"), as well as the proceeds from the sale of same, together with 15% of the proceeds of any and all distributions received by Molina as a result of his interest in Bebidas Purifcadas de Acapulco, S.A., Inmuebles para la Industria, S.A., E.M.S.A. Embotelladora Metropolitana, S.A., and its subsidiaries, BEPURA, Embotelladora el Sol, REVAMSA, Grupo Azul, Troika, Industria de Refrescos, S.a., and REFRISA (the Mexican Bottling Plants") and/or [*2]Pepsi-Gemex from 1971 to the present together with interest thereon; [b] a direction for Molina to account to petitioners for all monies received by Elmezzi as a result of his interest in the Mexican Bottling Plants and/or Pepsi-Gemex; [c] a holding that Molina's failure to pay over the sums due to the Estate of Thomas Elmezzi constitutes a breach of fiduciary duty and unjust enrichment; and [d] that the estate is entitled to the imposition of a constructive trust with respect to the monies due to the estate as a matter of law.

The decedent, Thomas Elmezzi, was an employee of Pepsico Corporation for over thirty-five years. He died on October 3, 2005. He was briefly survived by his spouse, Jeanne Elmezzi, who died three days after the decedent. The decedent's will was admitted to probate by this court on January 26, 2006. The will provides for a pour over of the decedent's assets into the Thomas Elmezzi Revocable Trust. The trust, in turn, provides for payments of specific bequests with the remainder to the Thomas and Jeanne Elmezzi Private Foundation.

The petition herein alleges that Molina possesses property that belongs to the estate. Specifically, the petitioners allege that the decedent and Molina had a "lifetime business association and friendship" and that the decedent owned stock or equity interest in the following companies: Bebidas Purificadas de Acapulco, S.A.; Immuebles para la Industria, S.A.; Embotelladora el Sol and REVAMSA; E.M.S.A. Embotelladora Metropolitana, S.A, and its subsidiaries; BEPURA; Grupo Azul; Troika; Industria Refrescos, S.A.; and REFRISA, all of which are Mexican corporations.

The petition further alleges that "in addition to the Mexican Pepsi Bottling Plants, at all times up to and including the day of death of the Decedent, Decedent owned an equity interest held by Molina as Nominee in Pepsi-Gemex, S.A. de C.V., a New York Stock Exchange Company, which through a series of transactions acquired the stock of the Mexican Bottling Plants." The petition alleges that the Mexican Bottling Plants were merged into a holding company named Troika ^[FN1] which subsequently merged into a corporation which became Pepsi-Gemex, S.A. de C. V. and that the decedent's equity interest in Troika transferred to the Pepsi-Gemex shares. In 2002, the Pepsi Bottling Company made a cash tender offer of $1.2 billion to acquire Pepsi-Gemex shares. The petitioners allege that the respondent's share of the proceeds of that sale amounted to approximately $480 million and that through the respondent, as nominee, the decedent owned 6% of Pepsi Gemex which amounts to approximately $72 million.In response to the petition, Molina denied that he was in possession of property belonging to decedent and averred that the decedent "never claimed to me that he owned stock or equity interests in the Mexican Bottling Plants or in any company that ultimately owns these plants" (see e.g. Affidavit of Enrique Molina in support of the motion to dismiss). Molina's answer to the Petition does not contain an affirmative defense sounding in "illegality" (CPLR 3018[b]) and does not set forth the substance of the Mexican laws that are relied upon in Molina's motion for summary judgment (CPLR 3016[e]). Molina's motions do not request leave to amend his pleading.

Disclosure is now complete and the pending motions are pre-trial dispositive motions [*3]with the trial scheduled for June of 2013.

Summary judgment is a drastic remedy which will be granted only when the party seeking summary judgment has established that there are no triable issues of fact (Alvarez v Prospect Hosp., 68 NY2d 329 [1986]; Andre v Pomeroy, 35 NY2d 361 [1974]). The party seeking summary judgment must make a prima facie showing of entitlement to judgment as a matter of law (Alvarez v Prospect Hosp., supra.; Zuckerman v City of New York, 49 NY2d 557 [1980]). Once the party seeking summary judgment has made a prima facie showing of entitlement to judgment as a matter of law, the burden shifts to the party opposing the motion to establish through proof in evidentiary form that triable issues of fact exist or that the party has an acceptable excuse for its failure to do so (Zuckerman v City of New York, supra; Davenport v County of Nassau, 279 AD2d 497 [2d Dept 2001]; Bras v Atlas Construction Corp., 166 AD2d 401 [2d Dept 1991]). The court's function is issue finding, not issue determination (Matter of Suffolk County Dept. of Social Services v James M., 83 NY2d 178 [1994]; Sillman v Twentieth Century Fox Film Corp., 3 NY2d 395 [1957]). When deciding a motion for summary judgment, the court must view the evidence in a light most favorable to the party opposing the motion and must give that party the benefit of every inference which can be drawn from the evidence (Negri v Stop & Shop, Inc., 65 NY2d 625 [1985]; Schuhmann v McBride, 23 AD3d 542 [2d Dept 2005]; Louniakov v M.R.O.D. Realty Corp., 282 AD2d 657 [2d Dept 2001]). If the court has any doubt as to the existence of a triable issue of fact, the motion for summary judgment must be denied (Freese v Schwartz, 203 AD2d 513 [2d Dept 1994]; Groger v Morrison Knudsen Co., 184 AD2d 620 [2d Dept 1992]). "Where different inferences may be drawn from facts that are undisputed, the case must go to trial and summary judgment will be denied" (Sodexho Management, Inc. v Nassau Health Care Corp., 23 AD3d 370, 371 [2d Dept 2005]; Shea v Johnson, 101 AD2d 1018, 1019 [4th Dept 1984]).

Petitioners' case is premised upon the decedent's ownership of a cognizable interest in the proceeds derived by Molina from his sale of shares of Pepsi-Gemex in 2003 at the time of decedent's death. Documentary evidence has been presented in support of this proposition. Petitioners have set forth a prima facie case supported by admissible evidence.

Ordinarily, the court would turn to the question of whether Molina has presented proof in evidentiary form that a triable issue of fact exists as to such entitlement. Here, the primary evidence presented in opposition to this proposition is Molina's affidavit and deposition testimony. While this evidence is inadmissable under the Dead Man's Statute (CPLR 4519), it is deemed admissible in the Second Department for purposes of defeating a summary judgment motion where there is some supportive admissible evidence (Tancredi v Mannino, 75 AD2d 579, 580 [2d Dept 1990]). Molina points to deposition testimony where the witnesses testified that Elmezzi stated that Molina owed him no money. Molina also asks the court to infer that there was no debt based upon Elmezzi's issuance of financial statements that do not list an interest in the Mexican Bottling Plants or the proceeds from Molina's sale of his Pepsi Gemex holdings as well as their not being mentioned in Elmezzi's tax returns. Such an inference is possible. Without comment as to the weight of this evidence, it is sufficient to create a question of fact. Under the criteria set forth above, petitioners' motion for summary judgment is accordingly denied.

To the extent that respondent's motion and cross-motion are dependent upon the decedent's purported ownership of the stock being null and void and unenforceable under [*4]Mexican law, such motions are denied without addressing the merits of such claim. A claim of illegality by reason of foreign law is an affirmative defense that should have been set forth in Molina's answer (CPLR 3018[b]; Brearton v DeWitt, 252 NY 495, 500 [1930]; see also CPLR 3016[e] ["when a ... defense is based upon law of a foreign country ..., the substance of the foreign law relied upon shall be stated...."]^[FN2]). The CPLR specifically states that specified defenses, including illegality, are matters which "would be likely to take the adverse party by surprise or would raise issues of fact not appearing upon the face of the prior pleading..." (CPLR 3018[b]). The general rule is that affirmative defenses are deemed waived if not raised in the pleadings, though such waiver can be retracted by amendment of the answer (Surlak v Surlak, 95 AD2d 371, 383 [2d Dept 1983]).^[FN3]

By letter dated December 7, 2012, Molina's counsel advised the court of a 2009 decision by the New York Court of Appeals that they assert is controlling and dispositive. Petitioners' counsel responded by letter dated December 11, 2012. The issue addressed is whether the decedent's failure to address the gain from the sale of the Pepsi Gemex stock in his tax returns bars the claim for ownership of such stock through a nominee. Absent from the motion papers are undisputed facts or a clear legal presentation as to decedent's obligation to report the gain from the sale of stock where he did not receive the proceeds inasmuch as the decedent (as are all individuals) is a cash basis taxpayer. Mahoney-Buntzman v Buntzman (12 NY3d 415, 422 [2009]), if applicable, does not require summary judgment in favor of Molina.

Respondent also argues that the petition should be dismissed for lack of a necessary party. Respondent's argument is unpersuasive and this branch of the motion is denied.

To the extent any relief requested by either party has not been addressed, such request is denied.

Respondent has requested oral argument. This request is also denied.

This is the decision and order of the court.

Dated: February 1, 2013

EDWARD W. McCARTY IIIJudge of the

Surrogate's Court