City of Long Beach v Agostisi

• Decision Date: 26 July 2021
• Docket Number: Index No. 002684/2020,Mot. Seq. No. 01 - MD
• Citation: City of Long Beach v Agostisi, 2021 NY Slip Op 33802(U), Index No. 002684/2020, Mot. Seq. No. 01 - MD (N.Y. Sup. Ct. Jul 26, 2021)
• Parties: CITY OF LONG BEACH, Plaintiff, v. ROBERT AGOSTISI, Defendant.
• Court: New York Supreme Court

2021 NY Slip Op 33802(U)

CITY OF LONG BEACH, Plaintiff, v. ROBERT AGOSTISI, Defendant.

Index No. 002684/2020, Mot. Seq. No. 01 - MD

Supreme Court, Suffolk County

July 26, 2021

Unpublished Opinion

MOTION DATE 12-14-2020

SUBMIT DATE 6-28-2021

INGERMAN SMITH, L.L.P. Attorneys for Plaintiff

LEEDS BROWN LAW, P.C. Attorneys for Defendant

PRESENT'. Hon. JOSEPH A. SANTORELLI Justice of the Supreme Court

HON JOSEH A. SANTORELLI J.S.C.

Upon the following papers numbered 1 to 167 read on this motion to dismiss;; Notice of Motion/ Order to Show Cause and supporting papers 1-48; Notice-of Cross Motion and supporting papers.; Answering Affidavits and supporting papers 49-129; Replying Affidavits and supporting papers 130-167; Other (and after hearing counsel in support and opposed to the motion) it is, By motion dated December 14, 2020, the defendant moves for an order pursuant to CPLR 3211(a)(1), (a)(7) or in the alternative CPLR 3211(c) dismissing the complaint.The plaintiff opposes the motion in all respects.

The plaintiffCity of Long Beach, (hereinafter the City), has commenced this action against the defendant, (the former Corporation Counsel and Acting City Manager for the City) seeking to recover money damages for breach of fiduciary duty, breach of duty of loyalty, fraud, conspiracy to commit fraud, constructive fraud, conversion and misappropriation of funds, unjust enrichment and money had and received.In addition, the City seeks to impose a constructive trust and an accounting of all monies and property allegedly taken by the defendant during the years 2006 through 2019.The City alleges, in brief, that the defendant took advantage of his position of trust and authority and misappropriated public funds for his own benefit.

To succeed on a motion to dismiss pursuant to CPLR 3211(a) for failure to state a cause of action, the court must determine whether, accepting as true the factual averments of the complaint and granting plaintiff every favorable inference which may be drawn from the pleading, plaintiff can succeed upon any reasonable view of the facts stated (SokoloffvHarriman Estates Dev. Corp., 96 N.Y.2d 409, 754 N.E.2d 184, 729 N.Y.S.2d 425[2001], see alsoFowler, Rodriguez, Kingsmill, Flint, Gray & Chalos LLP v Island Prop., LLC,307 A.D.2d 953, 763 N.Y.S.2d 481[2d Dept2003], Bartlett v Konner,228 A.D.2d 532, 644 N.Y.S.2d 550[2d Dept1996]).If the pleading states a cause of action and if, from its four comers, factual allegations are discerned which, taken together, manifest any cause of action cognizable at law, a motion for dismissal will fail(seeWayne S. v County of Nassau Dept, of Social Services,83 A.D.2d 628, 441 N.Y.S.2d 536[2d Dept1981]).The documentary evidence that forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiffs claim (seeEstate of Menon v Menon,303 A.D.2d 622, 756 N.Y.S.2d 639[ 2d Dept2003], citingLeon v Martinez,84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511, Roth v Goldman,254 A.D.2d 405, 406, 679 N.Y.S.2d 92).

In the context of a CPLR 3211 motion to dismiss, the Court must take the factual allegations of the complaint as true, consider the affidavits submitted on the motion only for the limited purpose of determining whether the plaintiff has stated a claim, and in the absence of proof that an alleged material fact is untrue or beyond significant dispute, the Court must not dismiss the complaint (Wall Street Assocs. v Brodsky,257 A.D.2d 526, 684 N.Y.S.2d 244[1^st Dept1999], citingGuggenheimer v Ginzburg,43 N.Y.2d 268, 275;Rovello v Orofino Realty Co.,40 N.Y.2d 633, 634-636).In making a determination whether the complaint sets forth a cognizable claim, evidentiary material may be considered to "remedy defects in the complaint"(seeDana v Shopping Time Corp.,76 A.D.3d 992, 908 N.Y.S.2d 114[2d Dept2010], quotingRovello v Orofino Realty Co., supra at 40 N.Y.2d at 636).

Further, a motion to dismiss a complaint pursuant to CPLR 3211(a)(1) may be granted only where the documentary evidence proffered utterly refutes the complaint's factual allegations, thereby conclusively establishing a defense as a matter of law (see, generally, Goshen v Mutual Life Ins. Co. Of N. Y.,98 N.Y.2d 314326;Leon v Martinez, supra).

Preliminarily the Court concludes that the "documentary evidence" submitted by the defendant does not "utterly refute" the allegations set forth in any of the causes of action in the complaint or "conclusively establish[ ] a defense as a matter of law .Therefore the defendant s motion to dismiss the complaint pursuant to CPLR 3211(a)(1) is in all respects denied.

The Court has reviewed the causes of action in the complaint in accordance with the law governing motions to dismiss pursuant to CPLR 3211(a)(7) and decides the motion as follows:

THE FIRST CAUSE OF ACTION:

BREACH OF FIDUCIARY DUTY/DUTY OF LOYALTY

The elements of a cause of action to recover damages for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant's misconduct' (Litvinoff v Wright,150 A.D.3d 714;see, Smallwoodv Lupoli, 107 A.D.3d 782, 784)

(Celauro v 4C Foods Corp.,187 A.D.3d 836, 837[2d Dept.2020]).

The defendant has proffered various arguments in support of his contention that the City has not pled and cannot prove any of the aforestated elements as related to his execution of an agreement and a supplemental agreement with the former City Manager.The defendant further claims that this cause of action has not been pled with the requisite degree of particularity.

In opposition the City argues that:

(1) a fiduciary relationship existed between the City and the defendant;

(2) there was misconduct by the defendant; and

(3) the City incurred damages as a result of the misconduct.

The Court concludes that, accepting as true the factual averments of the complaint and granting the plaintiff every favorable inference which may be drawn from the pleading, the City has pled a cause of action cognizable at law against the defendant for breach of fiduciary duty.Therefore the defendant's motion to dismiss the first cause of action is denied.

THE SECOND CAUSE OF ACTION: FRAUD

In Eurycleia Partner, LP v Seward & Kissel, LLP,12 N.Y.3d 553, the Court of Appeals addressed the pleading requirements of a fraud cause of action stating:

The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages (seeRoss v Louise Wise Servs., Inc.,8 N.Y.3d 478, 488, 836 N.Y.S.2d 509, 868 N.E.2d 189[2007];Lama Holding Co. v Smith Barney,88 N.Y.2d 413, 421, 646 N.Y.S.2d 76, 668 N.E.2d 1370[1996]).A claim rooted in fraud must be pleaded with the requisite particularity under CPLR 3016(b).

We recently explored the pleading requirements of CPLR 3016(b) in Pludemanv Northern LeasingSys., Inc., 10' N.Y.3d 486, 860 N.Y.S.2d 422, 890 N.E.2d 184[2008], In that case, we noted that the purpose underlying the statute is' to inform a defendant of the complained-of incidents.We cautioned that the statute"should not be so strictly interpreted as to prevent an otherwise valid cause of action in situations where it may be impossible to state in detail the circumstances constituting a fraud"(id at 491, 860 N.Y.S.2d 422, 890 N.E.2d 184[internal quotation marks and citation omitted]).Although there is certainly no requirement of "unassailable proof” at the pleading stage, the complaint must "allege the basic facts to establish the elements of the cause of action"(id. at 492, 860 N.Y.S.2d 422, 890 N.E.2d 184).We therefore held that CPLR 3016(b) is satisfied when the facts suffice to permit a "reasonable inference" of the alleged misconduct (id.).And, "in certain cases, less than plainly observable facts may be supplemented by the circumstances surrounding the alleged fraud"(id at 493, 860 N.Y.S.2d 422, . 890N.E.2d 184).

The defendant urges that the fraud cause of action should be dismissed because the City has not pled the elements with the requisite particularity.More specifically, the defendant argues that:

(1) there was no material misrepresentation of fact;

(2) the City has not pled and cannot prove a known falsity; and

(3) the City cannot establish the inducement and justifiable . reliance elements of the fraud cause of action.

In opposition, the City contends that the fraud cause of action has been satisfactorily pled with sufficient particularity.

The Court concludes that, accepting as true the factual averments of the complaint and granting the plaintiff every favorable inference which may be drawn from the pleading, the City has pled a cause of action cognizable at law against the defendant for fraud.Therefore, the defendant's motion to dismiss the second cause of action is denied.

THE THIRD CAUSE OF ACTION:

CONSPIRACY TO COMMIT FRAUD

New York does not recognize civil conspiracy to commit a tort as an independent cause of action (see, Alexander &amp Alexander of N.Y. v Fritzen,68 N.Y.2d 968, 969, 510 N.Y.S.2d 546, 503 N.E.2d 102;Brackett v Griswold,112 N.Y. 454, 466-467, 20 N.E. 376;Blanco v Polanco,116 A.D.3d 892, 895-896,986N.Y.S.2d 151;Dickinson v Igoni,76 A.D.3d 943, 945, 908 N.Y.S.2d 85).However, a plaintiff may plead the existence of a conspiracy in order to connect the actions of the individual defendants with an actionable, underlying tort, and establish that those actions were part of a common scheme (see, Alexander & Alexander of N.Y. v Fritzen,68 N.Y.2d at 969, 510 N.Y.S.2d 546, 503 N.E.2d 102;Blanco v Polanco,116 A.D.3d at

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