Preview
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
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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.
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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
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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
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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
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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
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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.
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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.
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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,
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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
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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