Morataya v 183 Lincoln Ave. LLC

Supreme Court, Westchester County

Decided on May 27, 2026

Index No. 55592/2026

Robert S. Ondrovic, J.

In an action, inter alia, for declaratory relief, to impose a constructive trust upon certain real property, and to recover damages for breach of fiduciary duty, breach of contract, and unjust enrichment, the defendants 183 Lincoln Avenue LLC and Gerald J. Shallo move pursuant to CPLR § 3211(a) to dismiss the complaint.

The following papers were considered on the motion:

PAPERS NUMBERED

Summons and Complaint, 1 — 5

Exhibits A — D

Notice of Motion, Affirmation, 6 — 8

Memorandum of Law

Affirmation in Opposition, 9 — 16

Exhibits A — G

Memorandum of Law in Reply 17

Relevant Factual and Procedural Background

The plaintiff commenced this action alleging fourteen causes of action seeking, inter alia, the imposition of a constructive trust on certain real property in West Harrison, New York (hereinafter the subject property), an accounting, to quiet title, related declaratory relief, and to recover damages for breach of fiduciary duty, breach of contract, fraud, and unjust enrichment. The gravamen of the complaint is that on April 3, 2014, the plaintiff and the defendant Gerald J. Shallo (hereinafter Shallo), purchased the subject property for the purpose of the plaintiff residing there "as the owner" (Complaint, ¶ 6). The plaintiff attached certain exhibits to the complaint, including a copy of the deed to the property, which listed the defendant 183 Lincoln Avenue LLC (hereinafter the LLC, together with Shallo, the defendants), as the purchaser. The plaintiff also attached a copy of the LLC's operating agreement, naming the plaintiff and Shallo as members and indicating that Shallo held a 96.62% interest in the LLC, while the plaintiff held a 3.38% interest.

The plaintiff alleged that the LLC was listed on the deed because the parties "did not believe Plaintiff was eligible for a mortgage" due to her immigration status (Complaint, ¶ 7). She also alleged that she contributed $20,000 toward the downpayment and $3,650 per month toward the mortgage, and paid the property's monthly expenses. The plaintiff alleged that she relied on Shallo's verbal representations that she would be the owner of the subject property and "Shallo is attempting to displace [her] from her home and steal the Subject Property" (id. at ¶ 16).

By notice of motion, the defendants moved pursuant to CPLR 3211(a) to dismiss the complaint. In a supporting affirmation and memorandum of law, the defendants' attorney argued that the first cause of action to recover damages for breach of contract is barred by the statute of frauds. He asserted that the causes of action alleging breach of fiduciary duty and constructive fraud, and seeking an accounting and to impose a constructive trust must be dismissed because the complaint fails to adequately plead the existence of a confidential or fiduciary relationship between the plaintiff and Shallo. He contended that the relationship between the plaintiff and Shallo is, at most, an employment or business relationship, which does not create a fiduciary relationship.

The defendants' attorney further argued that the plaintiff lacks standing to assert causes of action for partition and to quiet title since she does not have any ownership interest in the property. He emphasized that the documentary evidence submitted by the plaintiff conclusively demonstrates that the property is owned by the LLC. The defendants' attorney asserted that the causes of action alleging unjust enrichment, promissory estoppel, and breach of the implied covenant of good faith and fair dealing must be dismissed because they are duplicative of the breach of contract claim and the subject matter of the dispute is governed by the operating agreement. He argued that the complaint also fails to adequately plead an unconscionable injury so as to permit a cause of action based on promissory estoppel. The defendants' attorney contended that the cause of action to recover damages for money had and received is not viable since the existence of a valid and enforceable written contract precludes recovery based on a quasi contract theory. He asserted that the cause of action seeking an equitable mortgage must be dismissed because there are no allegations that the subject property was intended to serve as security for an obligation.

In an affirmation in opposition, the plaintiff's attorney argued that the complaint adequately alleges a confidential relationship between the plaintiff and Shallo "arising out of an employer-employee relationship that developed into one of trust and reliance" (NYSCEF Doc. No. 14, ¶ 27). He argued that the causes of action alleging unjust enrichment, and seeking an [*2]accounting, to quiet title, and to impose a constructive trust are alternate theories of recovery and not duplicative of the breach of contract cause of action. The plaintiff's attorney contended that the deed and operating agreement do not conclusively establish a defense to the plaintiff's causes of action. He asserted that the operating agreement undermines the defendants' contention that the plaintiff has no interest in the subject property. The plaintiff's attorney further argued that the statute of frauds is not a defense to a cause of action to impose a constructive trust.

In a reply affirmation, the defendants' attorney argued that the plaintiff should not be permitted to assert equitable claims in the face of a valid written agreement, to wit, the operating agreement. He asserted that the plaintiff's rights are limited to her membership interest in the LLC and not ownership of the subject property itself. The defendants' attorney also argued that the causes of action seeking to quiet title, partition/refinance, impose a resulting trust and equitable mortgage, and sounding in promissory estoppel, breach of fiduciary duty, money had and received, constructive fraud, and breach of the implied covenant of good faith and fair dealing must be dismissed because the plaintiff failed to offer any arguments in opposition to those branches of the defendants' motion.

ANALYSIS

"In considering a motion to dismiss ... pursuant to CPLR 3211(a)(7) the court must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Ikezi v 82nd St. Academics, 221 AD3d 986, 987 [2d Dept 2023] [internal quotation marks omitted]). "Dismissal ... is warranted if the plaintiff fails to assert facts in support of an element of the claim, or if the factual allegations and inferences to be drawn from them do not allow for an enforceable right of recovery" (id. at 987 [internal quotation marks omitted]).

"When evidentiary material is considered by the court on a motion pursuant to CPLR 3211(a)(7), the criterion is whether the proponent of the pleading has a cause of action, not whether the proponent has stated one, and, unless it has been shown that a material fact as claimed by the pleader 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" (id. at 988 [alterations and internal quotation marks omitted]). "Whether the complaint will later survive a motion for summary judgment, or whether the plaintiff will ultimately be able to prove its claims, of course, plays no part in the determination of a prediscovery CPLR 3211 motion to dismiss" (Lam v Weiss, 219 AD3d 713, 715 [2d Dept 2023] [internal quotation marks omitted]).

A party may move to dismiss one or more causes of action on the basis that they "may not be maintained because of ... statute of frauds" (CPLR 3211[a][5]). Under the statute of frauds, "[a] contract . . . for the sale . . . of any real property, or an interest therein, is void unless the contract or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the party to be charged, or by his [or her] lawful agent thereunto authorized by writing" (General Obligations Law § 5—703[e]; see Corriette v Mele, 244 AD3d 679, 682-683 [2d Dept 2025]; Gendler v Guendler, 174 AD3d 507, 509 [2d Dept 2019]). "An agreement which violates the statute of frauds may nonetheless be enforceable where there has been part performance unequivocally referable to the contract by the party seeking to enforce the agreement" (Barretti v Detore, 95 AD3d 803, 806 [2d Dept 2012] [internal quotation marks omitted]). "Unequivocally referable conduct is conduct which is inconsistent with any other [*3]explanation" (id. [internal quotation marks omitted]). Here, the plaintiff alleged that she entered into an oral agreement with Shallo whereby the plaintiff would be the owner of the subject property. Since the agreement to transfer ownership interest of the subject property to the plaintiff was required to be in writing, but was not, the eleventh cause of action in the complaint is barred by the statute of frauds (see Barretti v Detore, 95 AD3d 803, 805—806 [2d Dept 2012]). The text messages submitted by the plaintiff do not state all of the essential terms of the alleged oral agreement sufficient to satisfy the statute of frauds (see Ehrenreich v Israel, 188 AD3d 818, 819-820 [2d Dept 2020]). Furthermore, the plaintiff's alleged part performance was not unequivocably referable to the purported oral agreement she seeks to enforce (see Blank v Acker, 241 AD3d 1517, 1519 [2d Dept 2025]. "It is insufficient that the oral agreement gives significance to [the] plaintiff's actions. Rather the actions alone must be unintelligible or at least extraordinary, explainable only with reference to the oral agreement" (Madison Trust Company v Starwood I, LLC, 233 AD3d 854, 856 [2d Dept 2024] [internal quotation marks omitted]).

Accordingly, that branch of the defendants' motion which was to dismiss the eleventh cause of action sounding in breach of contract as barred by the statute of frauds is granted.

Regarding the cause of action for breach of the implied covenant of good faith and fair dealing, where there is no valid contract, no basis exists to assert the implied contractual claim (Bent v St. John's Univ., New York, 189 AD3d 973 [2d Dept 2020]). Here, the defendants demonstrated that the plaintiff does not have a cause of action sounding in breach of the implied covenant of good faith and fair dealing since the alleged oral agreement, which would form the basis for the implied covenant, is not valid as it does not satisfy the statute of frauds.

Accordingly, that branch of the defendants' motion which was to dismiss the fourteenth cause of action for breach of the implied covenant of good faith and fair dealing is granted.

A constructive trust is an equitable remedy that is not subject to the statute of frauds (see Chavez v Morales, 232 AD3d 757, 761 [2d Dept 2024]). "Generally, a constructive trust may be imposed when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain beneficial interest" (Fakiris v Fakiris, 192 AD3d 993, 993 [2d Dept 2021] [internal quotation marks omitted]). "To obtain the remedy of a constructive trust, a party is generally required to establish four factors, or elements, by clear and convincing evidence: (1) a confidential or fiduciary relationship, (2) a promise, (3) a transfer in reliance thereon, and (4) unjust enrichment flowing from the breach of the promise" (Daniels v Ruggiero, 230 AD3d 563, 565, 217 N.Y.S.3d 173 [internal quotation marks omitted]). However, "[t]hese factors serve only as a guideline, and a constructive trust may still be imposed even if all four elements are not established" (Estate of Uddin v Miah, 229 AD3d 764, 766 [2d Dept 2024] [internal quotation marks omitted]).

"A fiduciary relationship may exist when one party reposes confidence in another and reasonably relies on the other's superior expertise or knowledge, but not in an arm's-length business transaction involving sophisticated business people" (Saul v Cahan, 153 AD3d 947, 949 [2d Dept 2017] [internal quotation marks omitted]). Determining whether a confidential or fiduciary relationship exists is "necessarily fact-specific" and is grounded "in a higher level of trust than normally present in the marketplace between those involved in arm's length business transactions" (Chavez v Morales, 232 AD3d at 760 [internal quotation marks omitted]).

Here, at this early stage of the proceeding, the plaintiff adequately alleged the existence of a confidential or fiduciary relationship between her and Shallo (see AHA Sales, Inc. v Creative Bath Products, Inc., 58 AD3d 6, 22 [2d Dept 2008]). Although an employment [*4]relationship, standing alone, does not create a fiduciary relationship (see Shenkman v New York Coll. of Health Professionals, 29 AD3d 671, 672 [2d Dept 2006]; Ratner v CBS Corp., 68 AD3d 49, 55 [1st Dept 2009]), the complaint adequately alleged that the plaintiff and Shallo "maintained a close, intimate, and confidential relationship" (Complaint, ¶ 18), that extended beyond a conventional employer-employee or business relationship (see Berry v Wallerstein, 219 AD3d 924, 925-26 [2d Dept 2023]; Toobian v Golzad, 193 AD3d 778 [2d Dept 2021]). In addition, the plaintiff's allegations regarding her significant expenditures of time and money with respect to the subject property sufficiently pleaded the elements of a "transfer in reliance" and unjust enrichment to state a cause of action for the imposition of a constructive trust (see Hernandez v Florian, 173 AD3d 1144, 1145 [2d Dept 2019]; Plumitallo v Hudson Atl. Land Co., LLC, 74 AD3d 1038, 1040 [2d Dept 2010]).

Accordingly, that branch of the defendants' motion which was to dismiss the first cause of action for the imposition of a constructive trust is denied.

To state a cause of action to recover damages for unjust enrichment, a plaintiff must allege that "(1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered" (Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 182 [2011] [internal quotation marks omitted]). Although "[t]he existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter" (Barker v Time Warner Cable, Inc., 83 AD3d 750, 752 [2d Dept 2011] [internal quotation marks omitted]), here, at this juncture, the defendants failed to meet their burden of demonstrating that the deed and the operating agreement utterly refute the plaintiff's factual allegations and that the plaintiff does not have a cause of action sounding in unjust enrichment. Contrary to the defendants' contention, the plaintiff did not plead an unjust enrichment cause of action in order to circumvent the statute of frauds, but properly pled that cause of action in the alternative to her breach of contract cause of action (see Bardy v Bonnem, 239 AD3d 809, 812 [2d Dept 2025])

Accordingly, that branch of the defendants' motion which was to dismiss the fifth cause of action to recover damages for unjust enrichment is denied.

"In order to establish a breach of fiduciary duty, a plaintiff must prove the existence of a fiduciary relationship, misconduct by the defendant, and damages that were directly caused by the defendant's misconduct" (Guarino v North Country Mortg. Banking Corp., 79 AD3d 805, 807 [2d Dept 2010]). "'In order to recover damages for constructive fraud, the following elements must be established: that (1) a representation was made, (2) the representation dealt with a material fact, (3) the representation was false, (4) the representation was made with the intent to make the other party rely upon it, (5) the other party did, in fact, rely on the representation without knowledge of its falsity, (6) injury resulted and (7) the parties are in a fiduciary or confidential relationship'" (Berejka v Huntington Med. Group, P.C., 235 AD3d 821, 824-25 [2d Dept 2025], quoting Del Vecchio v Nassau County, 118 AD2d 615, 617-618 [2d Dept 1986]). "A cause of action sounding in breach of fiduciary duty must be pleaded with particularity under CPLR 3016(b)" (106 N. Broadway, LLC v Lawrence, 189 AD3d 733, 737 [2d Dept 2020]). As stated above, and contrary to the defendants' contention, the Court finds that the complaint adequately alleged that a confidential relationship existed between the plaintiff and Shallo that extended beyond a conventional employer-employee or business relationship (see Berry v Wallerstein, 219 AD3d 924, 925-26 [2d Dept 2023]; Toobian v Golzad, 193 AD3d [*5]778 [2d Dept 2021]).

Accordingly, those branches of the defendants' motion which was to dismiss the ninth cause of action for breach of fiduciary duty and the twelfth cause of action for constructive fraud are denied.

"'To maintain an equitable quiet title claim, a plaintiff must allege actual or constructive possession of the property and the existence of a removable cloud on the property, which is an apparent title, such as a deed or other instrument, that is actually invalid or inoperative'" (Morales v Rolon, 226 AD3d 765, 767 [2d Dept 2024], quoting Amex Dev., LLC v Aljohn Group, Inc., 209 AD3d 808, 811 [2d Dept 2022]). Here, the defendants demonstrated that the LLC holds title to the subject property, that the plaintiff has a membership interest in the LLC, and that there are no conveyances to the plaintiff in the chain of title. The plaintiff's alleged potential status as an equitable owner is insufficient to confer standing upon her to assert a cause of action to quiet title (see Morales v Rolon, 226 AD3d at 767).

Accordingly, that branch of the defendants' motion which was to dismiss the second cause of action to quiet title is granted.

"A person holding and in possession of real property as joint tenant or tenant in common, in which he [or she] has an estate of inheritance, or for life, or for years, may maintain an action for partition of the property, and for a sale if it appears that a partition cannot be made without great prejudice to the owners" (Real Property Actions and Proceedings Law § 901[1]; see Paquet v Murphy, 242 AD3d 1214, 1215 [2d Dept 2025]). In addition, "'[a] membership interest in the [LLC] is personal property. A member has no interest in specific property of the [LLC]'" (459 Washington Avenue, LLC v Atkins, 230 AD3d 1282, 1283 [2d Dept 2024], quoting Limited Liability Law § 601). Here, the plaintiff does not allege that she is holding and in possession of the subject property as joint tenant or tenant in common. Rather, she alleges that she is the sole owner of the property pursuant to an oral agreement she entered into with Shallo, notwithstanding that the LLC is listed on the deed as the owner. Therefore, the defendants met their burden of demonstrating that the plaintiff cannot maintain a cause of action for partition and sale of the subject property.

Accordingly, that branch of the defendants' motion which was to dismiss the third cause of action for partition and sale is granted.

"An accounting is an equitable remedy which a party may seek only where he or she can establish the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest" (South Shore Eye Care, LLP v Lane, 242 AD3d 792, 796 [2d Dept 2025] [internal quotation marks omitted]). "To obtain an accounting, a plaintiff must show that there was some wrongdoing on the part of a defendant with respect to the fiduciary relationship' concerning property in which the plaintiff has an interest" (Board of Managers of Country Pointe at Smithtown North Condominium v Country Pointe at Smithtown Homeowners Association, Inc., 240 AD3d 650, 651 [2d Dept 2025]). "To state a viable cause of action for an accounting, a plaintiff must also allege that he or she demanded an accounting, which the defendant refused to provide" (Rozenberg v Perlstein, 200 AD3d 915 [2d Dept 2021]). Here, the complaint failed to plead that the plaintiff made a demand for an accounting and that the defendants failed or refused to provide such an accounting (see Giambrone v Arnone, Lowth, Wilson, Leibowitz, Adriano & Greco, 197 AD3d 459, 462 [2d Dept 2021]; Mawere v Landau, 130 AD3d 986, 990 [2d Dept 2015]).

Accordingly, that branch of the defendants' motion which was to dismiss the fourth cause of action for an accounting is granted.

"A resulting trust may be established if (1) title to property is taken in the name of one person without the consent or knowledge of the person who paid a consideration for the transfer, or (2) in violation of a trust, the transferee has purchased property with the money of another person" (Franklin v Hafftka, 140 AD3d 922, 925 [2d Dept 2016]); see EPTL 7-1.3). Since neither situation is alleged in the complaint, the defendants met their burden of demonstrating that the plaintiff cannot maintain a cause of action for a resulting trust.

Accordingly, that branch of the defendants' motion which was to dismiss the seventh cause of action for a resulting trust is granted.

"The elements of a cause of action based upon promissory estoppel are a clear and unambiguous promise, reasonably and foreseeable reliance by the party to whom the promise is made, and injury sustained in reliance on that promise" (Del Vecchio v Gangi, 225 AD3d 666, 671 [2d Dept 2024]). "[W]here the elements of promissory estoppel are established, and the injury to the party who acted in reliance on the oral promise is so great that enforcement of the statute of frauds would be unconscionable, the promisor should be estopped from reliance on the statute of frauds" (Matter of Hennel, 29 NY3d 487, 494 [2017]; see Blank v Acker, 241 AD3d 1517, 1520 [2d Dept 2025]). "An 'unconscionable injury' is 'injury beyond that which flows naturally ... from the non-performance of the unenforceable agreement' " (Bent v St. John's Univ., NY, 189 AD3d 973, 976, quoting Merex A.G. v Fairchild Weston Sys., Inc., 29 F3d 821, 826 [2d Cir. 1994]). Here, the complaint failed to allege that the plaintiff would suffer an unconscionable injury if Shallo's promise to the plaintiff was not enforced (see Del Vecchio v Gangi, 225 AD3d at 671; Blank v Acker, 241 AD3d at 1520). Therefore, the defendants established that the plaintiff does not have a cause of action based on promissory estoppel where the underlying agreement is invalid because of the statute of frauds.

Accordingly, that branch of the defendants' motion which was to dismiss the eighth cause of action based upon promissory estoppel is granted.

"The essential elements of a cause of action for money had and received are (1) the defendant received money belonging to the plaintiff, (2) the defendant benefitted from receipt of the money, and (3) under principles of equity and good conscience, the defendant should not be permitted to keep the money" (Canzona v Atanasio, — AD3d —, 2026 NY Slip Op 02243 [2d Dept Apr. 15, 2026]; see Rocks & Jeans, Inc. v Lakeview Auto Sales & Service, Inc., 184 AD2d 502, 502 [2d Dept 1992]). Contrary to the defendants' contention, the complaint adequately alleged that the plaintiff has made significant expenditures of money with respect to the subject property since 2024, Shallo benefited from receipt of the money, and it would be against equity and good conscience to permit him to retain those funds (see City of Long Beach v Agostisi, 221 AD3d 776, 779-780 [2d Dept 2023]).

Accordingly, that branch of the defendants' motion which was to dismiss the tenth cause of action based on the theory of money had and received is denied.

"While [a] court will impose an equitable mortgage where the facts surrounding a transaction evidence that the parties intended that a specific piece of property is to be held or transferred to secure an obligation ... it is necessary that an intention to create such a charge clearly appear from the language and the attendant circumstances" (Fremont Inv. & Loan v Delsol, 65 AD3d 1013, 1014 [2d Dept 2009]). Here, since there are no allegations that the subject property was being held or transferred as security for an underlying obligation, the [*6]defendants met their burden of demonstrating that the plaintiff does not have a cause of action to impose an equitable mortgage.

Accordingly, that branch of the defendants' motion which was to dismiss the thirteenth cause of action is granted.

Accordingly, it is hereby

ORDERED that those branches of the defendants' motion which were pursuant to CPLR 3211(a) to dismiss the second, third, fourth, seventh, eighth, eleventh, thirteenth, and fourteenth causes of action are granted; and it is further,

ORDERED that those branches of the defendants' motion which were pursuant to CPLR 3211(a) to dismiss the first, fifth, sixth^FN1, ninth, tenth, and twelfth causes of action are denied; and it is further,

ORDERED that all other relief requested and not decided herein is denied.

The foregoing constitutes the Decision and Order of this Court.

Dated: May 27, 2026

White Plains, NY

E N T E R,

HON. ROBERT S. ONDROVIC, J.S.C.