Defendants Chi Nun Mui (Mui) and M and W Bakery, Inc. (M and W Bakery) move for an order, pursuant to CPLR 3212, granting them summary judgment to dismiss the complaint.

This action, to recover damages for breach of contract, fraud, misrepresentation, conversion, unjust enrichment and breach of the covenant of good faith and fair dealing, arises out of the alleged sale of a retail bakery in the Chinatown neighborhood of Manhattan.

The claims asserted are based on plaintiff's allegation that Mui "promise[d] to pay Plaintiff the sum of $200,000 and make Plaintiff a 30% shareholder, which offers were mutually accepted." See affirmation of Morton S. Minsley, dated January 11, 2013 (Minsley aff.), Ex. A (Complaint or Compl.), ¶ 7. The complaint further alleges that, to date, Mui has only paid plaintiff $50,000 despite repeated demands for the balance owed and plaintiff has not been made a shareholder of the company as had been mutually agreed.

I.Factual Background

By way of general background, plaintiff purchased a bakery located at 25 East Broadway, New York City, New York, in December 1995 and operated it under the name King Wah Bakery from January 25, 1996 through April 30, 2008. In June 2008, after an extensive renovation of the premises, M and W Bakery opened for business in the same location.

The point of contention between the parties is whether a partnership existed between plaintiff and Mui with respect to M and W Bakery, the former maintaining such a relationship did exist, and the latter contending that it did not. More specifically, plaintiff alleges that, sometime in late 2007, the parties entered into an oral agreement under which the King Wah Bakery would be valued at $200,000 and plaintiff would be given a 30% stake in M and W Bakery in return for Mui taking over the premises. See affirmation of Richard M. Hendler, dated March 26, 2013 (Hendler aff.), ¶ 7. For their part, defendants maintain that Mui purchased the [*2]business outright from plaintiff for a purchase price of $50,000, an amount that has been fully paid. Defendants also claim that the only relationship existing between Mui and plaintiff after the transaction was that plaintiff was retained by Mui to act as manager on a part-time basis during the transition process on account of his prior experience at that location.

It is against this backdrop that defendants move for summary judgment, arguing that the evidence demonstrates that, in 2008, plaintiff agreed to sell and Mui agreed to buy, for a purchase price of $20,000, the fixtures and equipment of King Wah Bakery and for Mui to pay plaintiff an additional sum of $30,000 to vacate and surrender the bakery already existing on the premises of 25 East Broadway.

A.Defendants' Proof

According to Mui, he was contacted by plaintiff in late 2007. See affidavit of Chin Nun Mui, sworn to November 8, 2012 (Mui aff.), ¶ 10. Plaintiff and Mui had been fellow employees at another Chinatown bakery many years before. Id., ¶ 9. Plaintiff told Mui that his lease had expired and that he was getting old and no longer wished to operate the King Wah Bakery. Id., ¶ 10. During the conversation, plaintiff asked Mui if he would be interested in taking over the location. Id. Mui told plaintiff that he would think about it but would first need to discuss it with his wife. Id.

Shortly thereafter, Mui informed plaintiff that he would be interested in opening his own business at that location after the King Wah Bakery closed but would not be able to do so until 2008. Id., ¶ 11. To help realize the plan, plaintiff told Mui that he would ask the landlord to allow him to stay for a few months after his lease expired, giving Mui the time he needed to make the move. Id. In a follow-up conversation, plaintiff told Mui that the landlord had agreed to extend plaintiff's lease. See Minsley aff., Ex. E (Mui deposition), at 47.

In December 2007, Mui paid plaintiff $20,000 in four $5,000 checks made payable to plaintiff's children. Mui aff., ¶ 12. In addition, Mui paid plaintiff $30,000 in cash — $20,000 in January 2007 and another $10,000 in April 2008. Id., ¶ 13. According to Mui, the $20,000 in checks was designated as payment for plaintiff's fixtures and equipment at the store, and in this connection, the parties executed a bill of sale, dated March 31, 2008. Id., ¶ 14 and Ex. D. In addition, "the $30,000 in cash was in payment to [plaintiff] for his goodwill at that location — to vacate the location where he had previously operated the King Wah Bakery." Id., ¶ 15. Mui categorically denies that he ever agreed to pay plaintiff any further consideration for his bakery. Id.^[FN1]

Upon acquiring the equipment, Mui incorporated M and W Bakery and entered into a lease directly with the landlord on behalf of M and W Bakery. Id., Exs. A (certificate of incorporation) and B (commercial lease).^[FN2]

Although the term of his lease commenced on April 1, 2008, Mui acknowledges that he allowed plaintiff to continue to operate the King Wah Bakery at the same location until the end [*3]of April 2008 at which time the King Wah Bakery finally closed and plaintiff terminated all of his former employees. Id., ¶ 16. Upon the closing of the King Wah Bakery, Mui took possession of the premises and contracted to renovate the space without any involvement by plaintiff. Id., ¶ 17. Mui paid for all of the expenses associated with the renovation. Id. Still, Mui found himself short of money and, on May 2, 2008, approached plaintiff for a $5,000 loan to help pay for the renovations. Id.

At this point, according to Mui, the parties agreed that plaintiff would become an employee of the bakery, as a manager, to help Mui get started in the business. Id., ¶ 18. In this capacity, plaintiff helped Mui open a business bank account and Mui gave plaintiff check signing privileges as "Manager" of the bakery. Id. ¶ 19 and Ex. F. Exercising this authority, plaintiff signed the rent checks to the Landlord in May and June 2008. See id., Ex. G.

On June 5, 2008, M & W Bakery opened for business. Id., ¶ 22. At some point during that day, an argument ensued between Mui's wife and plaintiff when she observed plaintiff opening the register and removing money. Id., ¶ 21. After the argument, plaintiff left the premises and never returned. Id. The next day, Mui paid back the $5,000 loan to plaintiff and had no further dealings with plaintiff. Id., ¶ 22.

It is also Mui's position that since plaintiff testified at his deposition that he only paid $70,000 to purchase the bakery (see Minsley aff., Ex. C, at 62) there is no basis to value the bakery at $200,000, especially when tax returns for the King Wah bakery for the years 2005 through 2007 show that it reported net losses for those years. See Minsley aff., Exs. G, H and I.

To counter plaintiff's deposition testimony that he had obtained another 5 year lease running through 2012, Mui submits proof in the form of the affidavit of Lawrence Tang, the current principal of the entity that is the landlord of the subject premises. Tang states that he could not find any record documenting that plaintiff had a valid and existing lease for Kung Wah Bakery at the time that Mui entered into a lease for M and W Bakery and that plaintiff must have been occupying the space under a previously expired lease. See affidavit of Lawrence Tang, sworn to February 3, 2012 (Tang aff.), ¶ 4. Mr. Tang, however, acknowledges that his mother Vicky Tang was the person who executed the lease on behalf of the landlord with M and W Bakery on March 31, 2008, and has since passed away. Id., ¶ 3.

B.Plaintiff's Proof

Plaintiff offers a completely different version of events. Plaintiff avers that when he first purchased King Wah Bakery in 1995 it required a total investment of $210,000 to get started. See affidavit of Shung Fong Chan, sworn to March 26, 2013 (Chan aff.), ¶ 8. Plaintiff explains that the $70,000 referred to by Mui was to obtain a transfer of the lease from the business that already occupied the premises and did not represent his entire capital investment. Id., ¶¶ 7-8.

Plaintiff further states that in late 2007, around the time his current lease was set to expire, he told the landlord that he needed partners to help him run his business because he was having a difficult time operating it by himself. Id., ¶ 9. Plaintiff denies ever having made the statement attributed to him by Mui, i.e., that he was too old and no longer wished to run the business. Id., ¶ 10. Plaintiff first approached Mui to see if he was interested in becoming a partner, having known him in the past when they worked together in other Chinatown bakeries. Id., ¶ 11. Initially, Mui referred plaintiff to another potential investor, a Mr. Gong, whom plaintiff did not know. In that negotiation, plaintiff asked for $300,000 for the bakery, and Mr. [*4]Gong made a counter offer of $250,000. Id. Afterward, Mui asked plaintiff how the negotiations with Mr. Gong were going and plaintiff told him what had transpired. Id. However, because he had a prior relationship with Mui and was more comfortable being in business with someone he knew, plaintiff offered to value the bakery at $200,000 if Mui would be willing to join him. Id.

From plaintiff's perspective, the $5,000 loan he gave to Mui to help complete the renovation in May 2008 was to help a business that he was already a part of, rather than, as Mui depicts it, reentering the scene after he had exited it upon sale of the business. Id., ¶ 15.

Plaintiff further states that after the argument that took place between him and Mui's wife he lost faith in the relationship, and told Mui they couldn't be partners. Id., ¶ 16. It is plaintiff's view of the parties' agreement that the $50,000 paid by Mui was only a down payment to join a business valued at $200,000 and that he is still owed the balance as he would no longer be involved. Id., ¶ 19.

At his deposition, plaintiff testified that the original lease under which he had occupied the premises had been extended several times and would have permitted him to stay at the premises through 2012. See Minsley aff., Ex. C, at 73,79-80,99-100, 101-04. With respect to the first lease extension, plaintiff testified that the original lease under which he occupied the space had the dates changed to reflect the new term of the lease from November 1, 2002 through October 31, 2007 and King Wah Bakery was listed as the tenant. Id., at 79-80. Plaintiff also testified that he negotiated the extension with Vicky Tang. Id., at 80. Plaintiff acknowledged that he did not have a copy of that lease, explaining that it was left at the bakery's office. Id., at 81-82. Plaintiff further testified that he obtained a second 5-year extension to the lease to run through 2012 but, as was the case with the first lease extension, he did not have a copy because it was left it in the bakery's office. Id., at 99-100, 101-04. Plaintiff stated that this lease was redone at the behest of Mui's attorney who claimed that the lease that plaintiff had was not clear because the company had changed its name to M and W Bakery. Id., at 109-10.^[FN3] According to plaintiff, the change of name for the bakery occurred because it was a name that Mui preferred. See Minsley aff., Ex. D, at 27, 31.

As to why plaintiff did not put the parties' agreement in writing or insist on having shares of the new corporation issued to him, plaintiff responded, "trust." Id., Ex. C, at 111; Ex. D, at 34-36. Similarly, when asked whether Mui requested a receipt for the $30,000 cash payment, plaintiff stated that he wanted to provide Mui with a receipt but Mui refused, saying "man of trust on both sides." Id., Ex. D, at 58. Plaintiff's understanding of the bill of sale is that it was generated at Mui's request for tax purposes. Id., at 56. Plaintiff further stated that his wife, who signed the bill of sale on behalf of King Wah Bakery was not and had never been an officer of the corporation and that he was not aware that she had signed the document. Id., at 55. He [*5]further testified that he had never seen the bill of sale before. Id., at 56.

II.Discussion

To prevail on a motion for summary judgment, the proponent must make a prima facie showing of entitlement to judgment as a matter of law, tendering evidentiary proof in admissible form. See Zuckerman v City of New York, 49 NY2d 557, 560 (1980). Once this showing has been made, the burden shifts to the party opposing the motion to rebut the prima facie showing by producing evidentiary proof in admissible form sufficient to require a trial of material issues of fact. See Kaufman v Silver, 90 NY2d 204, 208 (1997). Additionally, in deciding the motion, 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 favorable inference. Negri v Stop & Shop, 65 NY2d 625, 626 (1985).

In the instant case, the deposition testimony and affidavits reveal such a sharp divide as to the parties' fundamental understanding of the nature of their agreement that summary judgment to dismiss the complaint must be denied, the issues of fact properly left for a jury to determine.^[FN4]

Still, the court must consider defendants' additional argument in support of summary judgment, namely, even assumingthe existence of an oral agreement as alleged by plaintiff, such agreement violates New York's Statute of Frauds because it cannot be performed within one year. See McKinney's General Obligations Law § 5—701(a)(1).^[FN5] Specifically, defendants point to the 5-year lease entered into by M and W Bakery and argue that any agreement under which plaintiff was to be a shareholder in the new bakery could not have been performed within a year. Consequently, the alleged agreement falls within the Statute of Frauds, rendering the agreement unenforceable.

In opposition, plaintiff argues that the subject agreement did not set out any term of duration; it did not specify that plaintiff would have a stake in the business for a certain number of years. The agreement was simply a "promise to pay Plaintiff the sum of $200,000 and make Plaintiff a 30% shareholder, which offers were mutually accepted." Compl. ¶ 6. As there was no term of duration, plaintiff contends that the agreement was terminable at will and therefore, the Statute of Frauds has no bearing on the parties' dispute. See Foster v Kovner, 44 AD3d 23, 27 (1st Dept 2007) ("absent any definite term of duration, an oral agreement to form a partnership or [*6]joint venture for an indefinite period creates a partnership or joint venture at will," which is terminable at will, and therefore, not violative of the Statute of Frauds).

In evaluating the strength of defendants' argument, the court notes that the agreement between the parties, as alleged by plaintiff (the non-movant), makes no reference to the lease and nothing in its language makes the agreement's viability dependent on the lease. Indeed, defendants' position is at odds with the certificate of incorporation, attached as an exhibit to defendants' moving papers, which does not impose any time limitation on M and W Bakery's corporate existence. See Mui aff., Ex. A.

Consequently, the cases on which defendants rely are distinguishable. In Mendelovitz v Cohen, involving an alleged oral joint venture to open a design center, the court noted that the parties "expressly understood . . . that the project would take at least two years to complete ... ." 28 Misc 3d 1217(A), 2010 NY Slip Op 51380(U), at *8 (Sup Ct, Kings County 2010). Likewise, in Baum v Leviev Development, LLC, the court found an alleged oral agreement unenforceable under the Statute of Frauds because "[p]laintiff has admitted in his sworn deposition testimony that it was impossible for this project to be completed within one year, and that it would take at least five to seven years to complete." 2008 NY Slip Op 30398(U) (Sup Ct, Greene County 2008).Here, however, there is nothing to indicate that anything other than the continued operation of the bakery was contemplated. As the agreement alleged by plaintiff does not contain any definite term of duration, it is not void under the Statute of Frauds. See Foster v Kovner,44 AD3d at 27.

Because the court has concluded that there are issues of fact precluding summary judgement on the breach of contract claim, summary judgment on plaintiff's claims for breach of the covenant of good faith and fair dealing, unjust enrichment and conversion, all of which are predicated on the same allegations supporting the breach of contract claim, must also be denied.

Nevertheless, defendants are granted summary judgment on the fraud and misrepresentation claims. As plead, the fraud causes of action are duplicative of the breach of contract claim. In support of his fraud claim, plaintiff alleges that defendants induced him to sell King Wah Bakery by falsely "represent[ing] their intention to compensate Plaintiff the sum of $200,000.00 and a 30% shareholder position in M and W Bakery, Inc. ... ." Compl. ¶ 20. This misrepresentation is not collateral to the alleged oral agreement entered into between plaintiff and Mui. Rather, the representation concerns defendants' performance of the agreement itself.^[FN6]Thus, the fraud claims are dismissed as duplicative of the breach of contract claim. See Nagle v Shearson Lehman Bros., Inc., 190 AD2d 568, 569 (1st Dept 1993) (affirming lower court's dismissal of fraud claim on summary judgment motion because it was "essentially a restatement of [plaintiff's] first cause of action for breach of contract.").

Accordingly, it is

ORDERED that Defendants Chi Nun Mui (Mui) and M and W Bakery, Inc.'s motion for [*7]summary judgment to dismiss the complaint is granted to the extent that the second and third causes of action, for fraud and misrepresentation, respectively, are dismissed; and is otherwise denied.

Dated: October 30, 2013

ENTER:

______________________J.S.C.