Bild v. Konig
| Decision Date | 14 February 2011 |
| Docket Number | NO.:09-CV-5576(ARR),:09-CV-5576(ARR) |
| Parties | RAFAEL BILD, Plaintiff, v. MICHAEL KONIG and ABRAHAM WEIDER, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Plaintiff Rafael Bild ("Bild" or "Plaintiff) commenced this action on December 21, 2009 against defendants Michael Konig ("Konig") and Abraham Weider ("Weider" and, together with Konig, "Defendants"), invoking this court's diversity jurisdiction pursuant to 28 U.S.C. § 1332, and asserting New York state law claims of breach of contract. Plaintiff amended his complaint on May 27, 2010. Konig and Weider now move to dismiss Bild's Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons discussed below, Konig's motion to dismiss is granted and Weider's motion to dismiss is denied.
On or about December 31, 1998, Plaintiff entered into a loan agreement (the "Loan Agreement") with Weider, individually and as the corporate officer of Vanderveer Estates Holding, LLC ("Vanderveer" and, together with Weider, the "Borrowers"), by which Plaintiffagreed to loan Weider and Vanderveer the sum of three million dollars (the "Loan"). (Am. Compl, ¶ 6.) Weider intended to invest the proceeds of the Loan into "Vanderveer Estates, " a residential housing project in Brooklyn, New York, in which Weider and Konig were business partners. (Am. Compl. ¶ 7.) Pursuant to the Loan Agreement, Weider executed a promissory note (the "Note") dated December 31, 1998, in favor of Plaintiff, in the principal amount of three million dollars. (Am. Compl. ¶ 8). Interest on the Loan was to accrue at the annual rate of eleven percent, and the Loan Agreement required the Borrowers to make payments of $330,000, commencing on December 31, 1999, and continuing annually thereafter until the outstanding principal balance of the Loan was paid in full. (Loan Agreement ¶1.)2 Upon default or maturity of the Loan, the Note bears interest at fifteen percent. (Am. Compl. ¶10.) Although neither the Loan Agreement nor the Note provides a date certain for repayment of principal, the Loan Agreement dictates that in the event of a sale of Vanderveer Estates, all sums due to Plaintiff pursuant to the Note would become due and owing, and Weider would pay Plaintiff ten percent of the net profits from the sale. (Am. Compl, ¶11.) On July 20, 1999 Plaintiff and Weider amended the Loan Agreement and Note to increase Plaintiff's percentage profit in the sale of Vanderveer Estates to thirteen percent. (Am. Compl. ¶ 12.) Defendants failed to make any payments pursuant to the Loan Agreement and the Note. (Am. Compl, ¶ 13.)
Plaintiff alleges that "on multiple occasions" between August 6, 2003 and March 29, 2007, Weider made numerous representations to Plaintiff regarding his repayment of the Loan.
Specifically, Plaintiff asserts that Weider informed Plaintiff that: (1) Weider "and his business partner in the Vanderveer Project, Mr. Konig, were negotiating among themselves to arrange for the re-payment of all sums due Plaintiff, " (Am. Compl.¶ 14); (2) "Defendants had agreed to enter into an arbitration, whereby Mr. Konig's accountant, Abraham Roth of Roth & Company LLP [("Roth")], would serve as an arbitrator to either render an award or assist the Defendants in reaching an agreement between themselves to re-pay all sums due Plaintiff, " (Am. Compl. ¶ 14); (3) "if Plaintiff would refrain from hiring an attorney and filing an action against the Defendants, the Defendants would re-pay all sums due Plaintiff upon the conclusion of the arbitration, " (Am. Compl, ¶ 14); and (4) "once Mr. Roth had an opportunity to confirm that Plaintiff funded the loan described in the Loan Agreement and the Note, Mr. Roth would render a purported arbitration award or agreement requiring Mr. Konig to re-pay all sums due Plaintiff...." (Am. Compl, ¶ 15.) Moreover, Plaintiff further alleges that on multiple occasions between August 6, 2003 and March 29, 2007, Roth repeatedly advised Plaintiff that: (1) he "was conducting the arbitration between Defendants regarding their re-payment of the Loan Agreement and the Note"; (2) Plaintiff "would be repaid through the arbitration process"; and (c) Plaintiff "should not hire an attorney or file any legal action and, instead, should rely upon the arbitration." (Am. Compl. ¶ 16.)
On March 29, 2007, in connection with the arbitration, Defendants entered into a written agreement (the "March Agreement"), by which, according to Plaintiff, (Am. Compl, ¶ 17.) Thereafter on May 17, 2007, Defendants entered into a second agreement (the "May Agreement") in which Defendants notedthat several parties (May Agreement ¶ 2.) The May Agreement further provides that "Konig agrees to indemnify Weider for any actual monetary damages, costs and expenses, including reasonable attorney's fees, sustained by Weider in connection with and arising from any such claims." (May Agreement ¶ 2.)
On February 23, 2009, Plaintiff attended a meeting at Roth's office in Brooklyn, New York, where Weider and Roth communicated the contents of the March Agreement to Plaintiff. (Am. Compl, ¶ 19.) Following the meeting, Plaintiff continued to repeatedly question Weider as to when Plaintiff would be repaid. (Am. Compl.¶ 21.) However, Weider told Plaintiff that "if Plaintiff hired an attorney, Defendants would not re-pay Plaintiff and that he had consulted an attorney on Plaintiff's behalf and such attorney "recommended that Plaintiff refrain from filing suit and advised that, instead, Plaintiff should continue to seek re-payment through the purported arbitration and the [March] Agreement." (Am. Compl. ¶ 21.) Plaintiff alleges that based upon Defendants' representations, he refrained from filing suit against Defendants until December 21, 2009. (Am. Compl.¶ 22.) As of December 31, 2009, the unpaid principal and accrued interest due pursuant to the Loan Agreement and Note is $13,957, 174.19. (Am. Compl. ¶ 25.) Plaintiff asserts three causes of action in his Amended Complaint: (1) breach of the Loan Agreement by Weider; (2) breach of the Note by Weider; and (3) breach of the March Agreement by Konig.
Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a case should be dismissed only if "it appears beyond doubt that the plaintiff can prove no set of facts in supportof his claim which would entitle him to relief." Gould v. Lightstone Value Plus Real Estate Inv. Trust, Inc., 301 Fed. App'x 97, 99 (2d Cir. 2008) (citation omitted). A complaint must give the defendant "fair notice of what the... claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L. Ed. 2d 1081 (2007). See also Boykin v. KeyCorp, 521 F.3d 202, 214 (2d Cir. 2008). When deciding a motion to dismiss pursuant to Rule 12(b)(6), a court must accept all allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Ortiz v. Cornetta. 557 F.3d 646, 649 (2d Cir. 1989). However, a "pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Ashcroft v. Iqbal. — U.S. —-, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly. 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of further factual enhancement.'" Ashcroft. — U.S. —, 129 S.Ct, at 1949, 173 L.Ed.2d 868 . "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly. 550 U.S. at 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929. The plausibility standard requires "more than a sheer possibility that defendant has acted unlawfully." Iqbal. —U.S. —, 129 S.Ct, at 1949, 173 L. Ed. 2d 868.
When determining the sufficiency of plaintiffs' claim for Rule 12(b)(6) purposes, consideration is limited to the factual allegations in plaintiffs' amended complaint, to documents attached to the complaint as an exhibit or incorporated in it by reference, and to matters of which judicial notice may be taken. See Roth v. Jennings. 489 F.3d 499, 509 (2d Cir. 2007); Chambers v. Time Warner. Inc.. 282 F.3d 147, 153 (2d Cir. 2002). "In addition, even if not attached orincorporated by reference, a document upon which [the complaint] solely relies and which is integral to the complaint may be considered by the court in ruling on such a motion." Roth, 489 F.3d at 509 (internal quotation marks and citations omitted; alteration in original).
Defendants argue that Plaintiff's claims are barred by the statute of limitations. The determination of when a statute of limitations began to run is generally a factual one. See Bice v. Robb, 324 Fed. App'x 79, 81 (2d Cir. 2009) ( because the question of whether the statute of limitations had run "turns on a number of unresolved issues of fact that would benefit from discovery.") Thus, a "motion to dismiss is often not the appropriate stage to raise affirmative defenses like the statute of limitations." Ortiz v. City of New York. No. 10 Civ. 3576, 2010 WL 5116129, at *1 (E.D.N.Y. Dec. 13, 2010). However, "where the dates in a complaint show that an action is barred by a statute of limitations, a defendant may raise the affirmative defense in a pre-answer motion to...
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