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  • Westbury Recycling, Inc., 320 Barretto Street Corp. v. Westbury Transfer & Recycling, Llc, Rizzo Environmental Services Corp., Rizzo Associates, Inc., Raymond J. Rizzo, Jr., Kelly A. Rizzo, Carol M. Rizzo Commercial Division document preview
  • Westbury Recycling, Inc., 320 Barretto Street Corp. v. Westbury Transfer & Recycling, Llc, Rizzo Environmental Services Corp., Rizzo Associates, Inc., Raymond J. Rizzo, Jr., Kelly A. Rizzo, Carol M. Rizzo Commercial Division document preview
  • Westbury Recycling, Inc., 320 Barretto Street Corp. v. Westbury Transfer & Recycling, Llc, Rizzo Environmental Services Corp., Rizzo Associates, Inc., Raymond J. Rizzo, Jr., Kelly A. Rizzo, Carol M. Rizzo Commercial Division document preview
  • Westbury Recycling, Inc., 320 Barretto Street Corp. v. Westbury Transfer & Recycling, Llc, Rizzo Environmental Services Corp., Rizzo Associates, Inc., Raymond J. Rizzo, Jr., Kelly A. Rizzo, Carol M. Rizzo Commercial Division document preview
  • Westbury Recycling, Inc., 320 Barretto Street Corp. v. Westbury Transfer & Recycling, Llc, Rizzo Environmental Services Corp., Rizzo Associates, Inc., Raymond J. Rizzo, Jr., Kelly A. Rizzo, Carol M. Rizzo Commercial Division document preview
  • Westbury Recycling, Inc., 320 Barretto Street Corp. v. Westbury Transfer & Recycling, Llc, Rizzo Environmental Services Corp., Rizzo Associates, Inc., Raymond J. Rizzo, Jr., Kelly A. Rizzo, Carol M. Rizzo Commercial Division document preview
  • Westbury Recycling, Inc., 320 Barretto Street Corp. v. Westbury Transfer & Recycling, Llc, Rizzo Environmental Services Corp., Rizzo Associates, Inc., Raymond J. Rizzo, Jr., Kelly A. Rizzo, Carol M. Rizzo Commercial Division document preview
  • Westbury Recycling, Inc., 320 Barretto Street Corp. v. Westbury Transfer & Recycling, Llc, Rizzo Environmental Services Corp., Rizzo Associates, Inc., Raymond J. Rizzo, Jr., Kelly A. Rizzo, Carol M. Rizzo Commercial Division document preview
						
                                

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FILED: NASSAU COUNTY CLERK 12/02/2019 11:28 AM INDEX NO. 611623/2019 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 12/02/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU -------------------------------------X WESTBURY RECYCLING, INC. and 320 Index No: 611623/19 BARRETTO STREET CORP., Plaintiffs, - against - WESTBURY TRANSFER & RECYCLING, LLC, RIZZO ENVIRONMENTAL SERVICES CORP., RIZZO ASSOCIATES, INC., RAYMOND J. RIZZO, JR., KELLY A. RIZZO, and CAROL M. RIZZO, Defendants. -------------------------------------X DEFENDANTS' MEMORANDUM OF LAW IN OPPOSITION TO PARTIAL MOTION TO DISMISS COUNTERCLAIMS Submitted by: JULES A. EPSTEIN, P.C. Attorneys for Defendants Westbury Transfer & Recycling, LLC, Rizzo Environmental Services Corp., Raymond J. Rizzo and Kelly A. Rizzo Office & P.O. Address 100 Jericho Quad, Suite 300 Jericho, NY 11753 (516) 479-6339 1 of 29 FILED: NASSAU COUNTY CLERK 12/02/2019 11:28 AM INDEX NO. 611623/2019 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 12/02/2019 TABLE OF CONTENTS TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . i TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . ii-iii PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . 1 BACKGROUND FACTS. . . . . . . . . . . . . . . . . . . . . . . . 2 Merchant Credit Card Account. . . . . . . . . . . . . . . . . . 4 Plaintiffs' The License Agreement and Unlawful Duress . . . . . 5 Plaintiffs Collected Disposal Fees Belonging to Defendants. . . 7 Plaintiffs Repudiation of License Agreement and Assault . . . . 7 POINT I - DEFENDANTS HAVE SERVED AMENDED COUNTERCLAIMS AND PLAINTIFFS' ADDRESSED MOTION EITHER ABATES OR MUST BE TO THE AMENDED COUNTERCLAIMS. . . . . . . . . . . . . . . . . . 10 POINT II - STANDARD FOR REVIEW PURSUANT TO CPLR (7). . 11 3211(a) - PLAINTIFFS' CPLR POINT III MOTION PURSUANT TO 3211(A) (1) SHOULD BE DENIED. . . . . . . . . . . . . . . . . . . . . . . . 13 POINT IV - THE AMENDED COUNTERCLAIMS ADEQUATELY STATES A CAUSE OF ACTION FOR UNJUST ENRICHMENT. . . . . . . . . . . . . 14 POINT V - THE AMENDED COUNTERCLAIMS ADEQUATELY STATES A CAUSE OF ACTION TO RECOVER DAMAGES BASED ON DURESS . . . . . . 18 POINT VI - THE AMENDED COUNTERCLAIMS ADEQUATELY STATE A CAUSE OF ACTION TO IMPRESS A CONSTRUCTIVE TRUST. . . . . . . . 20 - PLAINTIFFS' DEFENDANTS' POINT VII MOTION TO DISMISS COUNTERCLAIMS FOR PUNITIVE DAMAGES SHOULD BE DENIED. . . 24 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . 25 i 2 of 29 FILED: NASSAU COUNTY CLERK 12/02/2019 11:28 AM INDEX NO. 611623/2019 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 12/02/2019 TABLE OF AUTHORITIES CPLR 3025(a). . . . . . . . . . . . . . . . . . . . . . . . . 10 CPLR 3211(a) (1) and (7) . . . . . . . . . . . . . . . . . 1,11,13 CPLR 3211(c). . . . . . . . . . . . . . . . . . . . . . . . . 12 232nd 511 W. owners Corp. v. Jennifer Realty Co., 98 NY2d 144, 152 (2002). . . . . . . . . . . . . . . . 11,13 AG Capital Funding Partners v. State Street Bank and Trust, 5 NY3d 582 (2005) . . . . . . . . . . . . . . . . . . . . . . . 11 Baratta v. Kozlowski, 94 AD2d 454). . . . . . . . . . . . . . 19 Beatty v. Guggenheim Exploration Co., 225 NY 380 (1919) . . 22,23 Blue Cross of Cent. New York, Inc. v. Wheeler, 93 AD2d 995, (43 Dept., 1983) . . . . . . . . . . . . . . . . . . . . 16 (2nd Butler v. Catinella, 58 AD3d 145 Dept., 2008) . . . . . . 16 (2nd Catli v. Lindenman, 48 AD2d 714 Dept., 1972) . . . . . . 11 (2nd Citibank, N.A. v. Walker, 12 AD3d 480, 481 Dept., 2004) . 16 (2nd Dean v. Dillon, 234 AD2d 256 Dept., 1996) . . . . . . . 23 EBCI, Inc. v. Goldman Saks, 799 NYS2d 170 (2005). . . . . . . 12 Gerstein v. 532 Broad Hollow Rd., Co., 75 AD2d 292. . . . . . 19 (2nd Gomez v. Eleni, LLC, 122 AD3d 797 Dept., 2014) . . . . . 22 Grand Realty Co. v. City of White Plains, 125 AD2d 639 (2nd 11 Dept., 1986) . . . . . . . . . . . . . . . . . . . . Guggenheimer v. Ginzburg, 43 NY2d 268 (1977). . . . . . . . 11,12 Latham v. Father Divine, 299 NY 22, 27, (1949). . . . . . . . 22 Lawrence v. Miller, 11 NY3d 588 (2008). . . . . . . . . . . . 11 ii 3 of 29 FILED: NASSAU COUNTY CLERK 12/02/2019 11:28 AM INDEX NO. 611623/2019 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 12/02/2019 Leon v. Martinez, 84 NY2d 83, 87 (1994) . . . . . . . . . . 11,12 Livadiotakis (2"~ v. Tzitzikalakis, 302 AD2d 369 Dept., 2003) 10 (2"4 Loeuis v. Grushin, 126 AD3d 761 Dept., 2015) . . . . . . 21 Mandarin Trading Ltd. v. Wildenstein, 16 NY3d 173, 182 (2011). 16 Mayer v. Bishop, 158 AD2d 878 (3 Dept.g 1990) 16 McGrath v. Hilding, 41 NY2d 625, 629 (1977)). . . . . . . . . 16 Mennelli v. Soumyah, 41 AD3d 388 (2007) . . . . . . . . . . . 16 Miglino v. Bally Total Fitness of Greater NY, Inc., 20 NY3d 342, 351 (2013) . . . . . . . . . . . . . . . . . . . . . . . 12 Mitchell Maxwell & Jackson, Inc. v. US Realty & Inv. Co., 2010 NY Slip Op 31901(U), % 23 . . . . . . . . . . . . . . . . . 16 Muller Constr. Co. v. New York Tel. Co., 40 NY2d 955. . . . . 19 Polnetsky v. Better Homes Depot, 97 NY2d 46 (2001). . . . . . 11 Rocanova v. Equitable Life, 83 NY2d 603 (1994). . . . . . . . 24 Sage Realty Corp. v. Proskower Rose, 251 AD2d 35 ( 1 Dep't p 1 998) 10 (1' Scull v. Scull, 94 AD2d 29 Dept. p 1983) g aff dp 67 NY2d 926 (1986)................... 22 Sharp v. Kosmalski, 40 NY2d 119 (1976)........... 21, 23 Sydney Roberts Associates v. Eichner Enterprises, 225 AD2d 510 (1" Dept., 1996) . . . . . . . . . . . . . . . . . . . . . . 11 (2" Terrano v. Fine, 17 AD3d 449 Dept., 2005) . . . . . . . . 10 V. Groppa Pools, Inc. v. Massello, 106 AD3d 722, 723 (2" Dept., 2013) . . . . . . . . . . . . . . . . . . . . 12 (3' Vopelak v. Tedeschi, 281 AD2d 809 Dept., 2001) . . . . . 22 Walker v. Sheldon, 10 NY2d 401 (1961) . . . . . . . . . . . . 24 (4'" Zuley v. Elizabeth Wende Breast Care, LLC, 12 AD3d 1460 Dept., 2015). . . . . . . . . . . . . . . . . . . . . . . . . 21 1. j 4 of 29 FILED: NASSAU COUNTY CLERK 12/02/2019 11:28 AM INDEX NO. 611623/2019 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 12/02/2019 PRELIMINARY STATEMENT Defendants Westbury Transfer & Recycling, LLC, Rizzo Environmental Services Corp., Raymond J. Rizzo, Jr. and Kelly A. Rizzo (collectively "Defendants") respectfully submit this Plaintiffs' memorandum of law in opposition to partial motion to dismiss counterclaims pursuant to _C_PLR 3211(a)(1) and (7). The Court is referred to Defendant Raymond J. Rizzo, Jr.'s Affidavit")l opposing affidavit ("Rizzo setting forth the factual Defendants' background for counterclaims. Plaintiffs' For the reasons set forth below, motion should be denied. Exhibit "3" to Epstein Affirmation in Opposition. 5 of 29 FILED: NASSAU COUNTY CLERK 12/02/2019 11:28 AM INDEX NO. 611623/2019 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 12/02/2019 FACTS2 STATEMENT OF Defendant Raymond J. Rizzo, Jr. ("Rizzo") is the owner of Defendant Rizzo Environmental Services Corp. and Defendant Westbury Environmental" Transfer & Recycling, LLC ("Rizzo and "Westbury Transfer") . Defendant Kelly A. Rizzo is Raymond Rizzo's wife ("Kelly"). Rizzo Environmental is engaged in the waste hauling and container rental business. Westbury Transfer is a New York limited liability company Agreement3 Rizzo organized to enter into the License with Plaintiffs, as Licensee, that is a subject of this action. Defendants own the transfer facility at 117 Magnolia Avenue, Westbury, New York (the "Transfer Facility"). facilities4 Permits to operate transfer are issued by the New York Department of Environmental Conservation (the "DEC"). The Transfer Facility is a facility permitted by the DEC. A limited number of transfer facilities are permitted by the DEC to operate within the State of New York. Access to a transfer facility is essential to Rizzo Environmental's waste hauling business as solid waste transported by Rizzo Environmental must be sorted before transfer to a landfill, recycling facility or for ²These facts are set forth in the Rizzo Affidavit. Exhibit "C" to Plaintiffs' motion. See, A transfer facility is a facility where solid waste, such as construction and demolition debris, is sorted before transfer for disposal at a landfill, recycling center or other waste processing facility. 2 6 of 29 FILED: NASSAU COUNTY CLERK 12/02/2019 11:28 AM INDEX NO. 611623/2019 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 12/02/2019 other processing, transfer or disposal. Esq.4 In 2015 Rizzo was introduced by Raymond Casey, to Plaintiffs' principals about the possibility of purchasing the Facility.5 Transfer Rizzo was interested in acquiring a licensed transfer facility to support and expand his waste hauling business. Plaintiffs' Mr. Casey, who also had a relationship with principals, advised Rizzo that Plaintiffs might be interested in selling, or "priority" providing Rizzo Environmental access to, the Transfer Facility. Plaintiffs6 expressed some interest in selling the Transfer - Rizzo's goal - and invited Rizzo to move his Facility primary waste hauling and container rental business to the Transfer Facility's site. In June, 2015 Rizzo Environmental and Plaintiffs entered into an oral agreement pursuant to which Rizzo Environmental moved its business operations to the Transfer Facility. Rizzo Environmental occupied office space at the Transfer Facility and received "priority" Transfer status to deliver and sort solid waste at the Facility. Plaintiffs well knew that once Rizzo Environmental moved its A lawyer who had represented Rizzo and Rizzo Environmental. 5The License Agreement includes a right of first refusal ("ROFR"). Plaintiffs' principals are Louis Carmine Sanzo and Michael Rich. Sanzo, 3 7 of 29 FILED: NASSAU COUNTY CLERK 12/02/2019 11:28 AM INDEX NO. 611623/2019 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 12/02/2019 operations to the Transfer Facility, Defendants could not readily extricate from and disengage their business relationship with Plaintiffs. The economic cost and business disruption, and limited availability of and access to other licensed transfer facilities, Defendants' rendered relocation of business away from the Transfer Facility economically unfeasible. The relationship stated harmoniously when Rizzo Environmental moved its business to the Transfer Facility. However, Messrs. Sanzo and Rich soon made it plain to Rizzo (through veiled and blunt threats) that they would not allow Defendants to take their business out of the Transfer Facility. Once Rizzo Environmental's business operations moved to the Transfer Facility, Rizzo was Plaintiffs' Plaintiffs' essentially at mercy and unable to resist threats and extortionate demands for money. Merchant Credit Card Account Rizzo Environmental did not have a credit card merchant account. Plaintiffs agreed to process Rizzo Environmental's customers' Plaintiffs' payments through credit card merchant account and, of course, remit those payments to Rizzo Environmental. This arrangement was appealing to Rizzo in order to enhance Rizzo Environmental's cash flow by expediting customer payments. 4 8 of 29 FILED: NASSAU COUNTY CLERK 12/02/2019 11:28 AM INDEX NO. 611623/2019 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 12/02/2019 Rizzo Environmental's customers paid their bills through Plaintiffs' credit card merchant account. Despite Rizzo's demands Plaintiffs' and promises, Plaintiffs never remitted those receipts to Rizzo Environmental. "offset" Plaintiffs either made up some phony claim to remittance of Rizzo Environment's revenue or simply refused to turnover the money. Approximately $500,000 is owed to Rizzo Environmental Plaintiffs collected between June, 2015 and September 2017 on their credit card merchant account and refused to turn over to Rizzo Environmental. Plaintiffs' Unlawful Duress The License Agreement and In mid-2017 Plaintiffs demanded that Rizzo enter into the License Agreement. Rizzo formed Westbury Transfer to serve as Licensee. Pursuant to the License Agreement, Westbury Transfer agreed to pay Plaintiffs a fixed license fee of $34, 512 monthly to exclusively operate the Transfer Facility. Plaintiffs insisted that Rizzo and his wife Kelly guaranty