Preview
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
TOWER BROKERAGE, INC., Index No. 653394/2022
Plaintiff,
ORAL ARGUMENT REQUESTED
-against-
BROOME 302 REALTY LLC and STEVEN
KACHANIAN,
Defendants.
DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT OF
THEIR MOTION TO DISMISS THE COMPLAINT
CERVINI SWANSON LLP
Scott L. Swanson, Esq.
420 Lexington Avenue, Suite 2250
New York, New York 10170
212-931-5600
sswanson@csllplaw.com
Counsel for Defendants
Broome 302 Realty LLC
and Steven Kachanian
1 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
Defendants Broome 302 Realty LLC (“Defendant”) and Steven Kachanian (“Defendant SK”
and, together with Defendant, referred to collectively as “Defendants”) in the captioned action (the
“Action”) with plaintiff Tower Brokerage, Inc. (“Plaintiff” and, together with Defendants, referred to
collectively as the “Parties”) submit this Memorandum of Law, together with the Affirmation of Scott
L. Swanson dated October 18, 2022 (the “Moving Affirmation”), and the exhibits attached thereto
(collectively, the “Motion Documents”), in support of their motion (the “Motion”) for an order pursuant
to CPLR §§ 3211(a)(1) and (7), together with other related laws, dismissing Plaintiff’s Verified
Complaint dated September 9, 2022 (the “Complaint”) and granting such other and further relief in
favor of Defendant and against Plaintiff as this Court deems just and proper.
PRELIMINARY STATEMENT
The Complaint consists of three (3) impermissibly vague, duplicative and group-pleaded claims,
inexplicably stated against multiple defendants without any regard for basic concepts of corporate
separateness, and/or the terms of the alleged contract between the parties. Each of these fatal defects in
the Complaint is addressed below and subjects the individual claims of Plaintiff to dismissal under CPLR
§ 3211(a). Standards governing relief under CPLR 3211(a)(1) and (7) are addressed below at Point 1,
followed by fatal pleading deficiencies common to all claims of the Complaint at Point 2, defects in the
first cause of action against Defendant for breach of contract at Point 3 (the “Contract Claim”), the
second cause of action for account stated against Defendant at Point 4 (the “Account Stated Claim”),
and the third cause of action against Defendant SK based upon some unidentified cause of action at Point
5 (the “Individual Claim”). In essence, the Complaint takes what appears to be allegations of a
straightforward nonpayment claim by Plaintiff in connection with an alleged brokerage relationship and
attempts to create undue leverage in this litigation by asserting broader categories of claims against not
2
2 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
only the alleged counterparty to the contract but also other individuals. This artifice should be noted by
Court and should not be rewarded.
STATEMENT OF FACTS
Although Defendants vigorously dispute the allegations of the Complaint, the Motion is based
purely upon the pleadings. Accordingly, for a recital of the facts relevant to the Motion, Defendants
respectfully refer the Court to the Complaint filed by Plaintiff in the Action together with a document
identified as “Exclusive Brokerage Agreement for Commercial Lease” dated July 13, 2021 attached as
an Exhibit A to the Complaint (the “Alleged Commission Agreement”). Copies of these documents
are attached to the Moving Affirmation as Exhibit A and B. Although the allegations are difficult to
decipher, in short, Plaintiff appears to assert a non-payment claim against Defendant as owner of a
commercial space in the building of Defendant located at 302 Broome Street, New York, New York (the
“Property”) in connection with the Alleged Commission Agreement. However, by the Complaint,
Plaintiff expands this seemingly simple nonpayment claim from not only the Contract Claim asserted
against Defendant at paragraphs 21 to 29 of the Complaint but also the Account Stated Claim against
Defendant at paragraphs 30 to 33 of the Complaint, and the Individual Claim inexplicably asserted
against Defendant SK at paragraphs 34 to 40 of the Complaint. Deficiencies in each of these claims is
addressed individually below.
LEGAL ARGUMENT
As demonstrated below, the Complaint and each of its individual causes of action are defective
in various respects and should be dismissed and/or, at a minimum, Plaintiff should be required to submit
a more detailed statement of its allegations and claims in accordance with section 3024(a) of the CPLR.
Point 1 below sets forth the applicable standards governing the Motion’s requests for relief, followed by
defects in pleading common the entire Complaint at Point 2, followed by specific defects in the Contract
3
3 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
Claim against Defendant at Point 3, the Account Stated Claim against Defendant at Point 4, and the
Individual Claim against Defendant SK at Point 5.
POINT 1. Application Standards Governing the Motion
The standards governing the instant request for relief by Defendants under CPLR §§ 3211(a)(1)
and (7) and 3024 are well settled under New York law. Each of these standards is addressed below.
A. Legal Standards Governing Dismissal Under CPLR § 3211(a)(7)
CPLR § 3211(a)(7) provides for dismissal of a cause of action where “the pleading fails to state
a cause of action.” Failure to state a cause of action is appropriate where the “facts as alleged [fail to
state] any cognizable legal theory” for liability. Leon v. Martinez, 84 N.Y.2d 83, 87-88
(1994). Pleadings are subject to dismissal under CPLR § 3211(a)(7) where they fail to meet applicable
pleading standards under New York law. See Sebro Packaging Corp. v. S.T.S. Indus., Inc., 93 A.D.2d
785, 785 (1 Dept. 1983).
st
Minimum pleading standards for all pleadings are set forth by CPLR § 3013
and impose two (2) base requirements relevant here: (i) first, that a pleading’s statements be sufficiently
particular to give notice of the “transactions, occurrences or series of transactions or occurrences,
intended to be proved”; and (ii) sufficiently particular to provide notice of the “material elements of each
cause of action or defense.” CPLR § 3013. For both of these requirements, the statute specifically
requires that the allegations be sufficiently particular to give this notice to both “the court and parties”
and, as such, special knowledge of the underlying allegations may not be presumed for the purposes of
this analysis. Id. With respect to each cause of action, CPLR § 3014 requires that “separate causes of
action or defenses … be separately stated and numbered.” CPLR § 3014.
Courts have consistently applied these minimum pleading standards to dismiss claims for breach
of contract and quasi-contract where a complaint’s allegations consist of conclusory allegations without
any “factual specificity” as to the transactions, occurrences, and/or claims intended to be
4
4 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
proven. Godfrey v. Spano, 13 N.Y.3d 358, 373, 892 N.Y.S.2d 272, 278, 920 N.E.2d 328, 334
(2009). Relevant here, contract claims and quasi-contract claims are subject to dismissal under CPLR §
3211(a)(7) where, as here, a complaint fails “to set forth the nature of the contractual obligation alleged
to have been violated, the approximate date of the contract, [and] the nature of the claimed
breach.” Sebro, 93 A.D.2d at 785 (explaining that failure to set forth these details “violated the
requirements set forth in CPLR 3013 that statements in a pleading shall be sufficiently particular to give
notice of the transactions intended to be proved and the material elements of each cause of action”).
Where a pleading is dismissed for violation of these pleading requirements, a plaintiff may not
serve an amended complaint without a showing by the plaintiff of “good ground to support a cause of
action.” Id., at 825. See also Sebro, 93 A.D.2d at 785-786 (noting that amendment must be supported
by “further showing” by evidence “that can properly be considered on a motion for summary judgment”
before leave to replead may be granted).
B. Legal Standards Governing Dismissal Under CPLR § 3024(a)
The standards governing requests for relief under CPLR § 3024(a) are similarly well settled.
Section 3024(a) of the CPLR provides that “[i]f a pleading is so vague or ambiguous that a party cannot
reasonably be required to frame a response he may move for a more definite statement.”
C. Legal Standards Governing Dismissal Under CPLR § 3211(a)(1)
The relevant standards governing dismissal under CPLR 3211(a)(1) are well settled. Dismissal
under CPLR 3211(a)(1) is warranted where the documentary proof refutes any material element of the
asserted claim or otherwise “establishes a defense to the asserted claims as a matter of law.” 511 West
232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 151-52 (2002). Documents such as
contracts, legal notices, as well as other forms of correspondence such as emails are regularly held to
constitute valid documentary evidence for purposes of CPLR 3211(a)(1). See, e.g., Langer v. Dadabhoy,
5
5 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
44 A.D.3d 425, 426 (1st Dept. 2007) (“documentary evidence in the form of e-mails” sufficient to
establish entitlement to dismissal under CPLR 3211(a)(1)) lv denied 10 N.Y.3d 712, 891 N.E.2d 307,
861 N.Y.S.2d 272 (2008); and Schutty v. Speiser Krause P.C., 86 A.D.3d 484, 484-485 (1st Dept 2011)
(legal correspondence sufficient for purposes of establishing a defense under CPLR
3211(a)(1)). Disproving just one element of the claim is all that is required. See, e.g., Kolchins v.
Evolution Mkts., Inc., 128 A.D.3d 47, 58 (1st Dept. 2015) (“If the documentary proof disproves an
essential allegation of the complaint, dismissal pursuant to CPLR 3211(a)(1) is warranted even if the
allegations, standing alone, could withstand a motion to dismiss for failure to state a cause of action.”).
POINT 2. The Complaint is Subject to Dismissal under CPLR § 3211(a)(7)
for Threshold Deficiencies and Defects in the Pleading
As a preliminary matter, the Complaint should be dismissed in its entirety for threshold
deficiencies in pleading under CPLR § 3211(a)(7) and/or, at a minimum, Plaintiff directed to file an
amended complaint with a more definite statement of its allegations and claims against each of
Defendants in accordance with CPLR § 3024(a). The standards governing this request are stated above
at Point 1. Here, the allegations of the Complaint are impermissibly vague and conclusory in nature, in
certain circumstances, relying upon group-pleaded claims against all of defendants without any
specification as to the actions and/or omissions of the named defendants underlying the claims or
recognition of corporate distinctions at all [see, e.g., Moving Aff., Ex. A, ¶¶ 4, 5, 12, 15, 17, 18, 19, 20,
and 26] and, in other circumstances, relying upon facially inconsistent allegations as to one unspecified
“defendant” being the alleged wrongdoer [see, e.g., id., ¶¶ 15, 25, and 30-33].
The net result of this vague and inconsistent group pleading is that neither Defendants nor the
Court could have any idea who is the claimed to be the alleged counterparty to the referenced brokerage
relationship with Plaintiff and/or on what basis. That is why New York law does not permit either group
pleading nor this type of vague pleading even under minimum pleading standards of CPLR 3013. The
prohibition on vague pleading and group pleading is well settled. See, e.g., CIFG Assur. N. Am., Inc. v.
6
6 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
Bank of America, N.A., 41 Misc.3d 1203[A], 980 N.Y.S.2d 275, 2013 NY Slip Op 51565[U] at *3 (Sup.
Ct., N.Y. Cty. 2013) ("[a] claim involving multiple [parties] must make specific and separate allegations
for each [of them]”). 1 See also. Sebro, 93 A.D.2d at 785 (contract claim subject to dismissal where
complaint failed to “to set forth the nature of the contractual obligation alleged to have been violated,
the approximate date of the contract, [and] the nature of the claimed breach” noting that the failure to set
forth these details “violated the requirements set forth in CPLR 3013 that statements in a pleading shall
be sufficiently particular to give notice of the transactions intended to be proved and the material
elements of each cause of action”); and Gordon v. Dino De Laurentiis Corp., 141 A.D.2d 435, 436 (1st
Dept. 1988) (“vague and conclusory allegations are insufficient to sustain a breach of contract cause of
action”). See also Furia v. Furia, 116 A.D.2d 694, 695 (2d Dept. 1986) (a pleading alleging a breach of
contract must specify "the terms of the agreement, the consideration, the performance by plaintiffs and
the basis of the alleged breach of the agreement by defendant”).
Accordingly, here, the Complaint should be dismissed in its entirety in light of these pervasive
deficiencies in pleading of its claims. Each of Defendants (and the Court) are entitled to know what are
the specific allegations underlying the claims asserted against each of them as a matter of law in New
York and minimum due process. The threadbare, group pleading of the Complaint fails to do that and
therefore should be dismissed. Further, to the extent any aspect of this request for relief is not granted,
Defendants respectfully request that, at a minimum, the Court direct Plaintiff to file an amended
complaint with a more definite statement of its allegations and claims against each of Defendants in
accordance with CPLR 3024(a).
1
See also Forefront Partners LLC v Omanoff, 2019 N.Y. Misc. LEXIS 519, *9, 2019 NY Slip Op 30306(U), *9 (Sup. Ct.,
N.Y. Cty, February 10, 2019) (where Judge Schecter noted dismissal of claims for group pleading appropriate, noting “group
pleading inhibit[ed] the court from understanding who exactly did what”); and Moore v Jay-Jay Cabaret, 2019 N.Y. Misc.
LEXIS 1289, *9, 2019 NY Slip Op 30754(U), *6 (Sup. Ct., N.Y. Cty., March 20, 2019) (applying settled rule that “group
pleading” which “fails to set forth the precise conduct charged to each defendant” is subject to dismissal) (citing People v
Marolda Props., Inc., 2017 NY Slip Op 32497(U), *8 [Sup Ct, N.Y. Cty. 2017]); Deep v Urbach, Kahn & Werlin LLP, 19
Misc. 3d 1142[A], 867 N.Y.S.2d 16, 2008 NY Slip Op 51139[U] [2008]) (dismissing group-pleaded claims against
professional advisors for impermissible group pleading, noting that “defendants cannot be expected to respond in a
meaningful way to generic allegations that a diverse group of so-called Professional Advisors collectively engaged in
unspecified conduct”). See also Stewart Tit. Ins. Co. v Liberty Tit. Agency, LLC, 83 A.D.3d 532, 533 (1st Dept. 2011).
7
7 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
POINT 3. The Complaint’s Contract Claim Against Defendant Should
Be Dismissed Under CPLR § 3211(a)(7) for Failure to State a Claim
For many of the same pleading deficiencies identified in the prior sections, Plaintiff’s Contract
Claim against Defendant – stated at paragraphs 21 to 29 of the Complaint – should be dismissed for
failure to state a claim under CPLR § 3211(a)(7). The allegations of the Complaint underlying this
claim simply do not provide Defendant or the Court with minimum notice of the alleged facts underlying
the claims against it. At times, the Complaint alleges that this claim is based upon allegations that the
alleged payment obligations to Plaintiff were breached by an unspecified “defendant” [see, e.g., Moving
Aff., Ex. A, ¶ 25], but, in the very same sections, Plaintiff alleges that unidentified “defendants” in fact
breached the alleged obligations to Plaintiff and are responsible for such breaches [see, e.g., id., ¶¶ 25,
26, 27, and 28]. Who are the defendants referenced in this section? Who is the Complaint claiming
breached the alleged contract with Plaintiff? What contract? On what basis is Plaintiff asserting that a
contract exists between itself and Defendant? Defendant is entitled to notice of the specific allegations
made by Plaintiff as to the actions of Defendant underlying the claims asserted against it. Merely
ignoring corporate independence of Defendant with other parties is not a permissible way of pleading
around these issues. On these grounds, the Contract Claim should be dismissed.
POINT 4. The Complaint’s Account Stated Claim Against Defendant Should
Be Dismissed Under CPLR § 3211(a)(7) for Failure to State a Claim
Likewise, Plaintiff’s Account Stated Claim against Defendant – stated at paragraphs 30 to 33 of
the Complaint – should be dismissed for failure to state a claim under CPLR § 3211(a)(7) as it violates
basic pleading standards and requirements under New York law. First, it is directly duplicative of the
Contract Claim – based upon all of the same claimed events, misconduct, and damages – with the only
8
8 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
additional allegation begin that Plaintiff “issued” a single invoice to Defendant demanding payment of
amounts purportedly due in the connection with the transaction.
On their face, these duplicative allegations do not support a claim for account stated under New
York law which requires, inter alia, allegations that a defendant regularly rendered monthly account
statements to a defendant in the regular course of business and the defendant retained those statements
without objection – resulting in an implied account stated. See, e.g., Capital One Bank (USA) v. Koralik,
51 Misc. 3d 74, 32 N.Y.S.3d 805 (1st Dept. 2016) (elements of claim for account stated include
allegations that “(1) plaintiff mailed the statements to defendant on a monthly basis, in the regular course
of business; and (2) defendant accepted and retained the statements for a reasonable period of time
without objection”); and Stephanie R. Cooper, P.C. v. Robert, 78 A.D.3d 572, 573 (1st Dept. 2010)
(nothing that cause of action for account stated required allegations that a plaintiff “generated detailed
monthly invoices and mailed them to defendant on a regular basis in the course of its business”).
Here, the Complaint merely alleges the “issuance” of a single invoice to Defendant which is not
sufficient to establish an account stated claim. Moreover, the Complaint only alleges that Plaintiff
“issued” an invoice to Defendant so for a purported “installment” of $48,916.31. Moving Aff., Ex. A, ¶
31. Yet, inexplicably, Plaintiff seeks nearly three (3) times that amount by this Account Stated Claim
which is itself patently improper. Finally, this entire claim is merely an impermissible duplication of the
Contract Claim and should be dismissed on this ground alone as well. See, e.g., Camacho v. IO
Practiceware, Inc., 136 A.D.3d 415, 417 (1st Dept. 2016) (quasi-contract claims are duplicative of
contract claim and subject to dismissal where “there is a written contract covering the dispute at issue”).
9
9 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
POINT 5. The Complaint’s Individual Claim Against Defendant SK
Be Dismissed Under CPLR § 3211(a)(7) for Failure to State a Claim
For many of the same reasons referenced in prior sections, Plaintiff’s Individual Claim against
Defendant SK – stated at paragraphs 34 to 40 of the Complaint – should be dismissed in its entirety.
First, the threadbare allegations of the Complaint underlying the Individual Claim are facially
deficient to meet any minimum pleading standards insofar as they do not provide either Defendants or
the Court with notice of the elements of the cause of action asserted against Defendant SK. Is it breach
of contract? Is it tort? Is it some other theory of liability? Is it multiple claims? As noted at Point 1, as
a matter of law in New York and of constitutional due process, Defendant SK is entitled to know what
the nature of the cause of action asserted against him is. However, the Complaint does not actually
identify by name or by its allegations what is the nature of the claim asserted against Defendant SK in
the Complaint. On this ground alone, the cause of action should be dismissed. See CPLR 3013.
Second, the Individual Claim should also be dismissed because Plaintiff’s own allegations of the
Complaint themselves contradict its claims of personal liability on the part of Defendant SK. Notably,
the Complaint specifically alleges that, inter alia: (i) Defendant SK signed the Alleged Commission
Agreement solely in a representative capacity and not as an individual [see, e.g., Moving Aff., Ex. A, ¶
35]; (ii) Defendant (not Defendant SK) conducted business under the name referenced in the agreement
[see, e.g., id., ¶ 36]; and (iii) the Alleged Commission Agreement defined the parties to the Agreement
to include corporate parents and subsidiaries (not individual principals) and that Defendant (not
Defendant SK) was the appropriate counterparty [see, e.g., id., ¶¶ 7 and 8]. This latter point is critical.
By Plaintiff’s own statements in the Complaint and its attachments, the terms of the Alleged Commission
Agreement specifically defined the “Owner” to be certain unnamed corporate parties which did not
include purported individual officers or principals of the signatories to the agreement. See, e.g., id., ¶ 7
10
10 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
(citing paragraph 8 of the Alleged Commission Agreement). Accordingly, whether examined under
CPLR § 3211(a)(1) or (a)(7), a simple review of allegations of the Complaint and the terms of the Alleged
Commission Agreement themselves establishes that the Individual Claim should be dismissed.
Third, the Individual Claim is otherwise deficiently pleaded. That is, beyond conclusory
allegations that Defendant SK should be held personally liable for the Alleged Commission Agreement,
the Complaint devoid of any meaningful specified factual allegation to support asserting any personal
claims against Defendant SK. The only apparent basis that the Complaint alleges for asserting personal
liability on the part of Defendant SK is that “[u]pon information and belief, based on online records of
the New York State Department of State, Division of Corporations, there is no limited liability company
registered in New York under the name “302 Broome Street Retail LLC.” Id., ¶ 6. Not being registered
to do business in New York is not a basis for imposing personal liability on corporate officers. Further,
although the Complaint does not provide any meaningful allegations to state a valid claim against
Defendant SK, it should be noted that several other legal principles preclude the assertion of claims
against Defendant SK in this circumstance. 2
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
2
Principles of law restricting claims against Defendant SK in this circumstance include: (i) New York law does not permit
duplication of contract claims in quasi contract and here the few factual allegations supporting the claim indicate that it is an
impermissible duplication of the Contract Claim asserted against a different party without basis; and (ii) the existence of an
express contract governing the subject transaction prevents Plaintiff from asserting alternative quasi-contractual claims for
relief from other parties on other grounds.See, e.g., Metro. Elec. Mfg. Co. v. Herbert Constr. Co., 183 A.D.2d 758, 759 (2d
Dept. 1992).
11
11 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
CONCLUSION
WHEREFORE, Defendant respectfully requests that the Court enter an Order: (i) pursuant to
CPLR §§ 3211(a)(1) and (7) dismissing the Complaint and the individual claims asserted against
Defendants in the Complaint, with prejudice; (ii) if the Court does not dismiss any aspect of the
Complaint, directing Plaintiff to file an amended pleading containing a more definitive statement of its
allegations and claims pursuant to CPLR § 3024(a); and (iii) granting such other and further relief in
favor of Defendant and against Plaintiff as this Court deems just and proper.
Dated: New York, New York
December 5, 2022 CERVINI SWANSON LLP
By:
Scott L. Swanson
420 Lexington Avenue, Suite 2250
New York, New York 10170
212-931-5600
sswanson@csllplaw.com
Counsel for Defendant
Broome 302 Realty LLC
and Steven Kachanian
12
12 of 13
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022
NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022
CERTIFICATION OF COMPLIANCE
The total number of words contained in this Memorandum of Law, inclusive of headings and footnotes
and exclusive of the caption and signature block, is 3,600.
/s/Scott L. Swanson
Scott L. Swanson
13
13 of 13
Preview
FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK TOWER BROKERAGE, INC., Index No. 653394/2022 Plaintiff, ORAL ARGUMENT REQUESTED -against- BROOME 302 REALTY LLC and STEVEN KACHANIAN, Defendants. DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT OF THEIR MOTION TO DISMISS THE COMPLAINT CERVINI SWANSON LLP Scott L. Swanson, Esq. 420 Lexington Avenue, Suite 2250 New York, New York 10170 212-931-5600 sswanson@csllplaw.com Counsel for Defendants Broome 302 Realty LLC and Steven Kachanian 1 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 Defendants Broome 302 Realty LLC (“Defendant”) and Steven Kachanian (“Defendant SK” and, together with Defendant, referred to collectively as “Defendants”) in the captioned action (the “Action”) with plaintiff Tower Brokerage, Inc. (“Plaintiff” and, together with Defendants, referred to collectively as the “Parties”) submit this Memorandum of Law, together with the Affirmation of Scott L. Swanson dated October 18, 2022 (the “Moving Affirmation”), and the exhibits attached thereto (collectively, the “Motion Documents”), in support of their motion (the “Motion”) for an order pursuant to CPLR §§ 3211(a)(1) and (7), together with other related laws, dismissing Plaintiff’s Verified Complaint dated September 9, 2022 (the “Complaint”) and granting such other and further relief in favor of Defendant and against Plaintiff as this Court deems just and proper. PRELIMINARY STATEMENT The Complaint consists of three (3) impermissibly vague, duplicative and group-pleaded claims, inexplicably stated against multiple defendants without any regard for basic concepts of corporate separateness, and/or the terms of the alleged contract between the parties. Each of these fatal defects in the Complaint is addressed below and subjects the individual claims of Plaintiff to dismissal under CPLR § 3211(a). Standards governing relief under CPLR 3211(a)(1) and (7) are addressed below at Point 1, followed by fatal pleading deficiencies common to all claims of the Complaint at Point 2, defects in the first cause of action against Defendant for breach of contract at Point 3 (the “Contract Claim”), the second cause of action for account stated against Defendant at Point 4 (the “Account Stated Claim”), and the third cause of action against Defendant SK based upon some unidentified cause of action at Point 5 (the “Individual Claim”). In essence, the Complaint takes what appears to be allegations of a straightforward nonpayment claim by Plaintiff in connection with an alleged brokerage relationship and attempts to create undue leverage in this litigation by asserting broader categories of claims against not 2 2 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 only the alleged counterparty to the contract but also other individuals. This artifice should be noted by Court and should not be rewarded. STATEMENT OF FACTS Although Defendants vigorously dispute the allegations of the Complaint, the Motion is based purely upon the pleadings. Accordingly, for a recital of the facts relevant to the Motion, Defendants respectfully refer the Court to the Complaint filed by Plaintiff in the Action together with a document identified as “Exclusive Brokerage Agreement for Commercial Lease” dated July 13, 2021 attached as an Exhibit A to the Complaint (the “Alleged Commission Agreement”). Copies of these documents are attached to the Moving Affirmation as Exhibit A and B. Although the allegations are difficult to decipher, in short, Plaintiff appears to assert a non-payment claim against Defendant as owner of a commercial space in the building of Defendant located at 302 Broome Street, New York, New York (the “Property”) in connection with the Alleged Commission Agreement. However, by the Complaint, Plaintiff expands this seemingly simple nonpayment claim from not only the Contract Claim asserted against Defendant at paragraphs 21 to 29 of the Complaint but also the Account Stated Claim against Defendant at paragraphs 30 to 33 of the Complaint, and the Individual Claim inexplicably asserted against Defendant SK at paragraphs 34 to 40 of the Complaint. Deficiencies in each of these claims is addressed individually below. LEGAL ARGUMENT As demonstrated below, the Complaint and each of its individual causes of action are defective in various respects and should be dismissed and/or, at a minimum, Plaintiff should be required to submit a more detailed statement of its allegations and claims in accordance with section 3024(a) of the CPLR. Point 1 below sets forth the applicable standards governing the Motion’s requests for relief, followed by defects in pleading common the entire Complaint at Point 2, followed by specific defects in the Contract 3 3 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 Claim against Defendant at Point 3, the Account Stated Claim against Defendant at Point 4, and the Individual Claim against Defendant SK at Point 5. POINT 1. Application Standards Governing the Motion The standards governing the instant request for relief by Defendants under CPLR §§ 3211(a)(1) and (7) and 3024 are well settled under New York law. Each of these standards is addressed below. A. Legal Standards Governing Dismissal Under CPLR § 3211(a)(7) CPLR § 3211(a)(7) provides for dismissal of a cause of action where “the pleading fails to state a cause of action.” Failure to state a cause of action is appropriate where the “facts as alleged [fail to state] any cognizable legal theory” for liability. Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994). Pleadings are subject to dismissal under CPLR § 3211(a)(7) where they fail to meet applicable pleading standards under New York law. See Sebro Packaging Corp. v. S.T.S. Indus., Inc., 93 A.D.2d 785, 785 (1 Dept. 1983). st Minimum pleading standards for all pleadings are set forth by CPLR § 3013 and impose two (2) base requirements relevant here: (i) first, that a pleading’s statements be sufficiently particular to give notice of the “transactions, occurrences or series of transactions or occurrences, intended to be proved”; and (ii) sufficiently particular to provide notice of the “material elements of each cause of action or defense.” CPLR § 3013. For both of these requirements, the statute specifically requires that the allegations be sufficiently particular to give this notice to both “the court and parties” and, as such, special knowledge of the underlying allegations may not be presumed for the purposes of this analysis. Id. With respect to each cause of action, CPLR § 3014 requires that “separate causes of action or defenses … be separately stated and numbered.” CPLR § 3014. Courts have consistently applied these minimum pleading standards to dismiss claims for breach of contract and quasi-contract where a complaint’s allegations consist of conclusory allegations without any “factual specificity” as to the transactions, occurrences, and/or claims intended to be 4 4 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 proven. Godfrey v. Spano, 13 N.Y.3d 358, 373, 892 N.Y.S.2d 272, 278, 920 N.E.2d 328, 334 (2009). Relevant here, contract claims and quasi-contract claims are subject to dismissal under CPLR § 3211(a)(7) where, as here, a complaint fails “to set forth the nature of the contractual obligation alleged to have been violated, the approximate date of the contract, [and] the nature of the claimed breach.” Sebro, 93 A.D.2d at 785 (explaining that failure to set forth these details “violated the requirements set forth in CPLR 3013 that statements in a pleading shall be sufficiently particular to give notice of the transactions intended to be proved and the material elements of each cause of action”). Where a pleading is dismissed for violation of these pleading requirements, a plaintiff may not serve an amended complaint without a showing by the plaintiff of “good ground to support a cause of action.” Id., at 825. See also Sebro, 93 A.D.2d at 785-786 (noting that amendment must be supported by “further showing” by evidence “that can properly be considered on a motion for summary judgment” before leave to replead may be granted). B. Legal Standards Governing Dismissal Under CPLR § 3024(a) The standards governing requests for relief under CPLR § 3024(a) are similarly well settled. Section 3024(a) of the CPLR provides that “[i]f a pleading is so vague or ambiguous that a party cannot reasonably be required to frame a response he may move for a more definite statement.” C. Legal Standards Governing Dismissal Under CPLR § 3211(a)(1) The relevant standards governing dismissal under CPLR 3211(a)(1) are well settled. Dismissal under CPLR 3211(a)(1) is warranted where the documentary proof refutes any material element of the asserted claim or otherwise “establishes a defense to the asserted claims as a matter of law.” 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 151-52 (2002). Documents such as contracts, legal notices, as well as other forms of correspondence such as emails are regularly held to constitute valid documentary evidence for purposes of CPLR 3211(a)(1). See, e.g., Langer v. Dadabhoy, 5 5 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 44 A.D.3d 425, 426 (1st Dept. 2007) (“documentary evidence in the form of e-mails” sufficient to establish entitlement to dismissal under CPLR 3211(a)(1)) lv denied 10 N.Y.3d 712, 891 N.E.2d 307, 861 N.Y.S.2d 272 (2008); and Schutty v. Speiser Krause P.C., 86 A.D.3d 484, 484-485 (1st Dept 2011) (legal correspondence sufficient for purposes of establishing a defense under CPLR 3211(a)(1)). Disproving just one element of the claim is all that is required. See, e.g., Kolchins v. Evolution Mkts., Inc., 128 A.D.3d 47, 58 (1st Dept. 2015) (“If the documentary proof disproves an essential allegation of the complaint, dismissal pursuant to CPLR 3211(a)(1) is warranted even if the allegations, standing alone, could withstand a motion to dismiss for failure to state a cause of action.”). POINT 2. The Complaint is Subject to Dismissal under CPLR § 3211(a)(7) for Threshold Deficiencies and Defects in the Pleading As a preliminary matter, the Complaint should be dismissed in its entirety for threshold deficiencies in pleading under CPLR § 3211(a)(7) and/or, at a minimum, Plaintiff directed to file an amended complaint with a more definite statement of its allegations and claims against each of Defendants in accordance with CPLR § 3024(a). The standards governing this request are stated above at Point 1. Here, the allegations of the Complaint are impermissibly vague and conclusory in nature, in certain circumstances, relying upon group-pleaded claims against all of defendants without any specification as to the actions and/or omissions of the named defendants underlying the claims or recognition of corporate distinctions at all [see, e.g., Moving Aff., Ex. A, ¶¶ 4, 5, 12, 15, 17, 18, 19, 20, and 26] and, in other circumstances, relying upon facially inconsistent allegations as to one unspecified “defendant” being the alleged wrongdoer [see, e.g., id., ¶¶ 15, 25, and 30-33]. The net result of this vague and inconsistent group pleading is that neither Defendants nor the Court could have any idea who is the claimed to be the alleged counterparty to the referenced brokerage relationship with Plaintiff and/or on what basis. That is why New York law does not permit either group pleading nor this type of vague pleading even under minimum pleading standards of CPLR 3013. The prohibition on vague pleading and group pleading is well settled. See, e.g., CIFG Assur. N. Am., Inc. v. 6 6 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 Bank of America, N.A., 41 Misc.3d 1203[A], 980 N.Y.S.2d 275, 2013 NY Slip Op 51565[U] at *3 (Sup. Ct., N.Y. Cty. 2013) ("[a] claim involving multiple [parties] must make specific and separate allegations for each [of them]”). 1 See also. Sebro, 93 A.D.2d at 785 (contract claim subject to dismissal where complaint failed to “to set forth the nature of the contractual obligation alleged to have been violated, the approximate date of the contract, [and] the nature of the claimed breach” noting that the failure to set forth these details “violated the requirements set forth in CPLR 3013 that statements in a pleading shall be sufficiently particular to give notice of the transactions intended to be proved and the material elements of each cause of action”); and Gordon v. Dino De Laurentiis Corp., 141 A.D.2d 435, 436 (1st Dept. 1988) (“vague and conclusory allegations are insufficient to sustain a breach of contract cause of action”). See also Furia v. Furia, 116 A.D.2d 694, 695 (2d Dept. 1986) (a pleading alleging a breach of contract must specify "the terms of the agreement, the consideration, the performance by plaintiffs and the basis of the alleged breach of the agreement by defendant”). Accordingly, here, the Complaint should be dismissed in its entirety in light of these pervasive deficiencies in pleading of its claims. Each of Defendants (and the Court) are entitled to know what are the specific allegations underlying the claims asserted against each of them as a matter of law in New York and minimum due process. The threadbare, group pleading of the Complaint fails to do that and therefore should be dismissed. Further, to the extent any aspect of this request for relief is not granted, Defendants respectfully request that, at a minimum, the Court direct Plaintiff to file an amended complaint with a more definite statement of its allegations and claims against each of Defendants in accordance with CPLR 3024(a). 1 See also Forefront Partners LLC v Omanoff, 2019 N.Y. Misc. LEXIS 519, *9, 2019 NY Slip Op 30306(U), *9 (Sup. Ct., N.Y. Cty, February 10, 2019) (where Judge Schecter noted dismissal of claims for group pleading appropriate, noting “group pleading inhibit[ed] the court from understanding who exactly did what”); and Moore v Jay-Jay Cabaret, 2019 N.Y. Misc. LEXIS 1289, *9, 2019 NY Slip Op 30754(U), *6 (Sup. Ct., N.Y. Cty., March 20, 2019) (applying settled rule that “group pleading” which “fails to set forth the precise conduct charged to each defendant” is subject to dismissal) (citing People v Marolda Props., Inc., 2017 NY Slip Op 32497(U), *8 [Sup Ct, N.Y. Cty. 2017]); Deep v Urbach, Kahn & Werlin LLP, 19 Misc. 3d 1142[A], 867 N.Y.S.2d 16, 2008 NY Slip Op 51139[U] [2008]) (dismissing group-pleaded claims against professional advisors for impermissible group pleading, noting that “defendants cannot be expected to respond in a meaningful way to generic allegations that a diverse group of so-called Professional Advisors collectively engaged in unspecified conduct”). See also Stewart Tit. Ins. Co. v Liberty Tit. Agency, LLC, 83 A.D.3d 532, 533 (1st Dept. 2011). 7 7 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 POINT 3. The Complaint’s Contract Claim Against Defendant Should Be Dismissed Under CPLR § 3211(a)(7) for Failure to State a Claim For many of the same pleading deficiencies identified in the prior sections, Plaintiff’s Contract Claim against Defendant – stated at paragraphs 21 to 29 of the Complaint – should be dismissed for failure to state a claim under CPLR § 3211(a)(7). The allegations of the Complaint underlying this claim simply do not provide Defendant or the Court with minimum notice of the alleged facts underlying the claims against it. At times, the Complaint alleges that this claim is based upon allegations that the alleged payment obligations to Plaintiff were breached by an unspecified “defendant” [see, e.g., Moving Aff., Ex. A, ¶ 25], but, in the very same sections, Plaintiff alleges that unidentified “defendants” in fact breached the alleged obligations to Plaintiff and are responsible for such breaches [see, e.g., id., ¶¶ 25, 26, 27, and 28]. Who are the defendants referenced in this section? Who is the Complaint claiming breached the alleged contract with Plaintiff? What contract? On what basis is Plaintiff asserting that a contract exists between itself and Defendant? Defendant is entitled to notice of the specific allegations made by Plaintiff as to the actions of Defendant underlying the claims asserted against it. Merely ignoring corporate independence of Defendant with other parties is not a permissible way of pleading around these issues. On these grounds, the Contract Claim should be dismissed. POINT 4. The Complaint’s Account Stated Claim Against Defendant Should Be Dismissed Under CPLR § 3211(a)(7) for Failure to State a Claim Likewise, Plaintiff’s Account Stated Claim against Defendant – stated at paragraphs 30 to 33 of the Complaint – should be dismissed for failure to state a claim under CPLR § 3211(a)(7) as it violates basic pleading standards and requirements under New York law. First, it is directly duplicative of the Contract Claim – based upon all of the same claimed events, misconduct, and damages – with the only 8 8 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 additional allegation begin that Plaintiff “issued” a single invoice to Defendant demanding payment of amounts purportedly due in the connection with the transaction. On their face, these duplicative allegations do not support a claim for account stated under New York law which requires, inter alia, allegations that a defendant regularly rendered monthly account statements to a defendant in the regular course of business and the defendant retained those statements without objection – resulting in an implied account stated. See, e.g., Capital One Bank (USA) v. Koralik, 51 Misc. 3d 74, 32 N.Y.S.3d 805 (1st Dept. 2016) (elements of claim for account stated include allegations that “(1) plaintiff mailed the statements to defendant on a monthly basis, in the regular course of business; and (2) defendant accepted and retained the statements for a reasonable period of time without objection”); and Stephanie R. Cooper, P.C. v. Robert, 78 A.D.3d 572, 573 (1st Dept. 2010) (nothing that cause of action for account stated required allegations that a plaintiff “generated detailed monthly invoices and mailed them to defendant on a regular basis in the course of its business”). Here, the Complaint merely alleges the “issuance” of a single invoice to Defendant which is not sufficient to establish an account stated claim. Moreover, the Complaint only alleges that Plaintiff “issued” an invoice to Defendant so for a purported “installment” of $48,916.31. Moving Aff., Ex. A, ¶ 31. Yet, inexplicably, Plaintiff seeks nearly three (3) times that amount by this Account Stated Claim which is itself patently improper. Finally, this entire claim is merely an impermissible duplication of the Contract Claim and should be dismissed on this ground alone as well. See, e.g., Camacho v. IO Practiceware, Inc., 136 A.D.3d 415, 417 (1st Dept. 2016) (quasi-contract claims are duplicative of contract claim and subject to dismissal where “there is a written contract covering the dispute at issue”). 9 9 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 POINT 5. The Complaint’s Individual Claim Against Defendant SK Be Dismissed Under CPLR § 3211(a)(7) for Failure to State a Claim For many of the same reasons referenced in prior sections, Plaintiff’s Individual Claim against Defendant SK – stated at paragraphs 34 to 40 of the Complaint – should be dismissed in its entirety. First, the threadbare allegations of the Complaint underlying the Individual Claim are facially deficient to meet any minimum pleading standards insofar as they do not provide either Defendants or the Court with notice of the elements of the cause of action asserted against Defendant SK. Is it breach of contract? Is it tort? Is it some other theory of liability? Is it multiple claims? As noted at Point 1, as a matter of law in New York and of constitutional due process, Defendant SK is entitled to know what the nature of the cause of action asserted against him is. However, the Complaint does not actually identify by name or by its allegations what is the nature of the claim asserted against Defendant SK in the Complaint. On this ground alone, the cause of action should be dismissed. See CPLR 3013. Second, the Individual Claim should also be dismissed because Plaintiff’s own allegations of the Complaint themselves contradict its claims of personal liability on the part of Defendant SK. Notably, the Complaint specifically alleges that, inter alia: (i) Defendant SK signed the Alleged Commission Agreement solely in a representative capacity and not as an individual [see, e.g., Moving Aff., Ex. A, ¶ 35]; (ii) Defendant (not Defendant SK) conducted business under the name referenced in the agreement [see, e.g., id., ¶ 36]; and (iii) the Alleged Commission Agreement defined the parties to the Agreement to include corporate parents and subsidiaries (not individual principals) and that Defendant (not Defendant SK) was the appropriate counterparty [see, e.g., id., ¶¶ 7 and 8]. This latter point is critical. By Plaintiff’s own statements in the Complaint and its attachments, the terms of the Alleged Commission Agreement specifically defined the “Owner” to be certain unnamed corporate parties which did not include purported individual officers or principals of the signatories to the agreement. See, e.g., id., ¶ 7 10 10 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 (citing paragraph 8 of the Alleged Commission Agreement). Accordingly, whether examined under CPLR § 3211(a)(1) or (a)(7), a simple review of allegations of the Complaint and the terms of the Alleged Commission Agreement themselves establishes that the Individual Claim should be dismissed. Third, the Individual Claim is otherwise deficiently pleaded. That is, beyond conclusory allegations that Defendant SK should be held personally liable for the Alleged Commission Agreement, the Complaint devoid of any meaningful specified factual allegation to support asserting any personal claims against Defendant SK. The only apparent basis that the Complaint alleges for asserting personal liability on the part of Defendant SK is that “[u]pon information and belief, based on online records of the New York State Department of State, Division of Corporations, there is no limited liability company registered in New York under the name “302 Broome Street Retail LLC.” Id., ¶ 6. Not being registered to do business in New York is not a basis for imposing personal liability on corporate officers. Further, although the Complaint does not provide any meaningful allegations to state a valid claim against Defendant SK, it should be noted that several other legal principles preclude the assertion of claims against Defendant SK in this circumstance. 2 [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 2 Principles of law restricting claims against Defendant SK in this circumstance include: (i) New York law does not permit duplication of contract claims in quasi contract and here the few factual allegations supporting the claim indicate that it is an impermissible duplication of the Contract Claim asserted against a different party without basis; and (ii) the existence of an express contract governing the subject transaction prevents Plaintiff from asserting alternative quasi-contractual claims for relief from other parties on other grounds.See, e.g., Metro. Elec. Mfg. Co. v. Herbert Constr. Co., 183 A.D.2d 758, 759 (2d Dept. 1992). 11 11 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 CONCLUSION WHEREFORE, Defendant respectfully requests that the Court enter an Order: (i) pursuant to CPLR §§ 3211(a)(1) and (7) dismissing the Complaint and the individual claims asserted against Defendants in the Complaint, with prejudice; (ii) if the Court does not dismiss any aspect of the Complaint, directing Plaintiff to file an amended pleading containing a more definitive statement of its allegations and claims pursuant to CPLR § 3024(a); and (iii) granting such other and further relief in favor of Defendant and against Plaintiff as this Court deems just and proper. Dated: New York, New York December 5, 2022 CERVINI SWANSON LLP By: Scott L. Swanson 420 Lexington Avenue, Suite 2250 New York, New York 10170 212-931-5600 sswanson@csllplaw.com Counsel for Defendant Broome 302 Realty LLC and Steven Kachanian 12 12 of 13 FILED: NEW YORK COUNTY CLERK 12/05/2022 09:41 PM INDEX NO. 653394/2022 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/05/2022 CERTIFICATION OF COMPLIANCE The total number of words contained in this Memorandum of Law, inclusive of headings and footnotes and exclusive of the caption and signature block, is 3,600. /s/Scott L. Swanson Scott L. Swanson 13 13 of 13