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  • Alk Properties, Llc v. Athos Patsalides, Efstathia TzathaOther Matters - Contract Non-Commercial document preview
  • Alk Properties, Llc v. Athos Patsalides, Efstathia TzathaOther Matters - Contract Non-Commercial document preview
  • Alk Properties, Llc v. Athos Patsalides, Efstathia TzathaOther Matters - Contract Non-Commercial document preview
  • Alk Properties, Llc v. Athos Patsalides, Efstathia TzathaOther Matters - Contract Non-Commercial document preview
  • Alk Properties, Llc v. Athos Patsalides, Efstathia TzathaOther Matters - Contract Non-Commercial document preview
  • Alk Properties, Llc v. Athos Patsalides, Efstathia TzathaOther Matters - Contract Non-Commercial document preview
  • Alk Properties, Llc v. Athos Patsalides, Efstathia TzathaOther Matters - Contract Non-Commercial document preview
  • Alk Properties, Llc v. Athos Patsalides, Efstathia TzathaOther Matters - Contract Non-Commercial document preview
						
                                

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FILED: NASSAU COUNTY CLERK 11/06/2023 06:33 PM INDEX NO. 614134/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 11/06/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU ––––––––––––––––––––––––––––––––––––––––– x ALK PROPERTIES, LLC, : : : Index No. 614134/2023 Plaintiff, : : v. : AFFIRMATION IN SUPPORT OF : DEFENDANTS’ MOTION ATHOS PATSALIDES and EFSTATHIA TZATHA : TO DISMISS PURSUANT TO CPLR : 3211(a)(7) Defendants. : : : ––––––––––––––––––––––––––––––––––––––––– X PAUL PETRAS, an attorney duly authorized to practice law in the Courts of the State of New York, hereby affirms and states: (1) I am the attorney for the defendants Athos Patsalides and Efstathia Tzatha and I am fully familiar with the facts and circumstances of this action. (2) I make this affirmation in support of defendant’s motion for an order pursuant to C.P.L.R. §3211(a)(7) dismissing plaintiff’s causes of action for fraud and tortious interference with economic relations. PRELIMINARY STATEMENT (3) Plaintiff brought the instant action by filing a Summons and Verified Complaint on or about August 31, 2023. (Annexed hereto as Exhibit “A”) Plaintiff was the owner of the residential premises located at 10 High Meadow Court, Old Brookville, New York (the “Premises”) Plaintiff and defendants entered into a residential Lease Agreement for the premises on May 2, 2021. Said Lease Agreement provided defendants with a lease renewal option for a 1 1 of 7 FILED: NASSAU COUNTY CLERK 11/06/2023 06:33 PM INDEX NO. 614134/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 11/06/2023 period of one year. On March 6, 2022, defendants informed plaintiff in writing that they were executing the lease renewal which extended the lease for an additional year. In August 2022, defendants moved out of the leased premises. (4) Plaintiff now brings this action alleging, inter alia, causes of action for fraud and tortious interference with economic relations. The plaintiff fails to adequately plead these causes of actions which should be dismissed pursuant to CPLR 3211(a)(7). I. LEGAL ARGUMENTS A. The Fraud Claim Must be Dismissed (i) Plaintiff Has Failed to Plead its Fraud Claim With Sufficient Particularity. (5) To sustain a fraud cause of action, a plaintiff must plead, with the factual specificity required by CPLR 3016(b), a material misrepresentation of fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance, and damages. Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559 (2009); Pludeman v. Northern Leasing Sys., Inc. 10 N.Y.3d 486, 491, 860 N.Y.S.2d 422 (2008). Plaintiff’s fraud claim must be dismissed because it does not plead a material misrepresentation or knowledge of falsity with the requisite specificity and it does not properly plead that plaintiff relied on the alleged intentional misrepresentation as an inducement to its action or detrimental change of position, and that the reliance was reasonable or justifiable under the circumstances. Plaintiff alleges that on March 6, 2022, defendants forwarded an email to plaintiff advising of their intent to exercise the Renewal option in the Lease Agreement (Compl. ¶ 35). Plaintiff further alleges that defendants intentionally misrepresented to plaintiff that they intended to remain in the premise through May 31, 2023 despite knowing that they would be 2 2 of 7 FILED: NASSAU COUNTY CLERK 11/06/2023 06:33 PM INDEX NO. 614134/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 11/06/2023 purchasing real property and had no intention of remaining in the premises through May 31, 2023. (Compl. ¶ 36). Plaintiff does not state when or how such alleged misrepresentation was made by defendants or the specific words spoken. Absent this information, it can only be concluded that these allegations are conclusions drawn by plaintiff simply from the fact that defendants exercised their right to renew the lease. Similarly, plaintiff alleges that defendants knew that they were purchasing the property located at 57 Dogleg Lane, Roslyn Hights, NY 11577 and that they would not be fulfilling the full term of the lease period. (Compl. ¶ 39). Plaintiff does not state when defendants knew they were purchasing the property located at 57 Dogleg Lane, Roslyn Hights, NY 11577 or how or why defendants knew they were not fulfilling the full term of the Renewal period. Plaintiff simply makes conclusory allegations unsupported by specific facts. (6) The fact that plaintiff is unable to identify the specific words that were allegedly false and used to deceive plaintiff requires dismissal of the fraud claim under CPLR 3016(b). See Brown v. Wolf Group Integrated Communications, LTD. et al., 23 A.D.3d 239, 240, 806 N.Y.S.2d 9 (1st Dep’t. 2005) (dismissing fraud claim under CPLR 3016(b) for failure to specify the words used to deceive the plaintiff); see also Gregor, et. al. v. Rossi, et. al., 120 A.D.3d 447, 992 N.Y.S.2d 17, 18 (1st Dep’t. 2014) (dismissing fraud claim under CPLR 3016(b) because the words used by defendants to deceive the plaintiff were not set forth in the complaint). See Orchid Constr. Corp. v. Gonzalez, 89 A.D.3d 705, 707-708 (2d Dep't 2011) (dismissing fraud claim under CPLR 3016 (b) because "the circumstances of the fraud must be stated in detail, including specific dates and items." And, explaining “the plaintiff did not set forth the time or place of [defendant’s] alleged misrepresentation, and failed to properly plead the elements of misrepresentation of a material fact and justifiable reliance with specificity). 3 3 of 7 FILED: NASSAU COUNTY CLERK 11/06/2023 06:33 PM INDEX NO. 614134/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 11/06/2023 (7) Second, plaintiffs’ fraud claim must be dismissed because, a plaintiff must show both that it relied on the intentional misrepresentation as an inducement to its action or detrimental change of position, and that the reliance was reasonable or justifiable under the circumstances. Cusack v. Greenberg Traurig, LLP, 109 A.D.3d 747, 749 (1st Dep’t 2013); B & C Realty, Co. v. 159 Emmut Properties LLC, 106 A.D.3d 653, 655 (1st Dep’t 2013). Surely, plaintiff, a sophisticated corporate landlord, who negotiated the terms of the subject lease, knew that by leasing the premises to defendants with a right of renewal, it could not sell the property during the renewal period. Surely the plaintiff knew that by merely leasing the property for the renewal term, it was not guaranteed that the defendants would be able to fulfill the full terms of the lease. (ii) Plaintiff’s Fraud Claim Should Be Dismissed Because it is Duplicative of the Action for Breach of Contract. (8) Where a claim to recover damages for fraud "is premised upon alleged breach of contractual duties and the supporting allegations do not concern misrepresentations which are collateral or extraneous to the terms of the parties agreement, a cause of action sounding in fraud does not lie" McKernin v. Fanny Farmer Candy Shops Inc., 176 AD2d 233, 574 NYS2d 58 (2nd Dep’t., 1991). See also Krantz v. Chateau Stores of Canada, 256 AD2d 186, 187, 683 N.Y.S.2d 24 (1st Dep’t 1998) ("the plaintiff must allege a breach of duty which is collateral or extraneous to the contract between the parties.") Moreover, “a cause of action alleging breach of contract may not be converted to one for fraud merely with an allegation that the contracting party did not intend to meet its contractual obligations.” Refreshment Mgt. Servs., Corp. v. Complete Off. Supply Warehouse Corp., 89 A.D.3d 913, 914 (2d Dep't 2011). Where the alleged misrepresentation refers only to the intent or ability to perform under the contract then such misrepresentation is duplicative of the breach of contract claim. Gorman v. Fowkes, 97 AD3d 726, 949 NYS2d 96 (2d Dep’t. 2012). Plaintiffs’ fraud claim here relies on the allegation that defendants entered into a one-year 4 4 of 7 FILED: NASSAU COUNTY CLERK 11/06/2023 06:33 PM INDEX NO. 614134/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 11/06/2023 lease renewal for the property located at 10 High Meadow Court, Old Brookville, NY 11545 with the knowledge that they would not be fulfilling the full term of the Renewal Period. (Compl. ¶ 39). Plaintiffs’ fraud claim, therefore, is clearly predicated on or related to the lease agreement described in the Complaint, and therefore must fail. A “cause of action to recover damages for fraud may not be maintained where the only fraud alleged relates to a breach of contract.” Cablelot Sys., Inc. v. GE Med. Sys. Info. Tech., Inc., 2012 N.Y. Misc. LEXIS 5232, *20 (N.Y. Sup. Ct. Nov. 7, 2012). B. The Tortious Interference Claim Must be Dismissed (9) To state a claim for tortious interference with economic relations, a plaintiff must show: (1) the existence of a valid economic relationship with a third party, (2) the defendant's knowledge of that relationship, (3) the defendant's intentional and improper procurement of a breach by a third party, and (4) damages. White Plains Coat & Apron, Inc., 8 N.Y.3d 422, 835 N.Y.S.2d 530 (2007). Tortious interference with prospective economic relations….requires a showing that the interference was accomplished by wrongful means or with malicious intent. Arnon Ltd. (IOM) v. Beierwaltes, 125 A.D.3d 453, 453, 3 N.Y.S.3d 31 (1st Dept 2015). Wrongful means have been held to include physical violence, threats, fraud or misrepresentation, breach of fiduciary duty, civil suits and criminal prosecutions, and some degrees of economic pressure. See Carvel Corp.v. Noonan, 3 N.Y.3d 182, 191, 785 N.Y.S. 2d 359 (2004); See also Jurlique, Inc. v. Austral Biolab Pty., Ltd., 187 A.D.2d 637 at 639, 590 N.Y.S.2d 235 (2nd Dept 1992). A claim for tortious interference with prospective business relations does not require a breach of an existing contract, but the party asserting the claim must meet a "more culpable 5 5 of 7 FILED: NASSAU COUNTY CLERK 11/06/2023 06:33 PM INDEX NO. 614134/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 11/06/2023 conduct" standard. NBT Bancorp. v Fleet/Norstar Fin. Group, 87 NY2d 614, 641 N.Y.S. 2d 581 (1996). This standard is met where the interference with prospective business relations was accomplished by wrongful means or where the offending party acted for the sole purpose of harming the other party. See Carvel Corp. v Noonan, 3 N.Y. 3d at 182; Caprer v Nussbaum, 36 A.D.3d 176, 204, 825 N.Y.S. 2d 55 2006). “'Wrongful means” include physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure". Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 N.Y.2d 183, 191, 428 N.Y. S. 2d 628 (1980), quoting Restatement [Second] of Torts §§ 768, Comment e and 767, Comment c). As a general rule, the offending party's conduct must amount to a crime or an independent tort, as conduct that is neither criminal nor tortious will generally be "lawful" and thus insufficiently "culpable" to create liability for interference with prospective business relations Carvel Corp. v Noonan, 3 NY3d at 190. (10) In the case at bar, plaintiff alleges that before the lease was renewed, plaintiff received an offer to purchase the leases premises for $2,700,000.00. (Compl. ¶ 12). Plaintiff does not plead with any particularity when the offer was made, by whom it was it made or how the offer was communicated. Similarly, plaintiff makes only a conclusory allegation that defendants were aware that plaintiff had received a bona fie offer to purchase the premises. (Compl. ¶ 12). Here too, plaintiff does not specifically state how or when defendants became aware of this. Absent this information, plaintiff does not sufficiently plead the existence of a valid economic relationship with a third party or the defendant's knowledge of that relationship. the defendant's intentional and improper procurement of a breach by a third party (11) Lastly, the Complaint does not support a claim that defendants intentionally or improperly engaged in wrongful means or acted for the sole purpose of harming the plaintiff. At 6 6 of 7 FILED: NASSAU COUNTY CLERK 11/06/2023 06:33 PM INDEX NO. 614134/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 11/06/2023 the time the alleged offer to purchase was made, the defendants merely exercised their contractual rights under the lease to renew for another year. If the defendants engaged in any wrongful conduct (which they vehemently deny) it would be the alleged breach of the terms of the lease in August 2022, five months after the alleged offer was made. (12) For the reasons set forth above, the causes of action for fraud and tortious interference with economic relations must be dismissed. WHEREFORE, your affirmant respectfully request that the causes of action for fraud, tortious interference with economic relations and should be dismissed in their entirety pursuant to CPLR 3211(a)(7) in the plaintiff has failed to plead valid causes of action and for such other and further relied that this Court may deem just and proper. Affirmed: Manhasset, New York November 6, 2023 PETRAS LAW OFFICE PLLC By: PAUL PETRAS, ESQ. 7 7 of 7