Georgy United Statesov v. Marc Lazar & Mark Lazar, Inc.
| Decision Date | 22 August 2014 |
| Docket Number | 13 Civ. 818 (RWS) |
| Parties | GEORGY USOV; Plaintiff, v. MARC LAZAR AND MARK LAZAR, INC.; Defendants. |
| Court | U.S. District Court — Southern District of New York |
APPEARANCES:
Attorneys for the Plaintiff
KAGAN LUBIC LEPPER LEWIS GOLD & COLBERT LLP
New York, NY 10016
By: Emil Anthony Samman, Esq.
NEIMAN GINSBURG AND MAIRANZ P.C.
39 Broadway
NY, NY 10006
By: Marvin Neiman, Esq.
There are several motions currently pending in this action between Plaintiff Georgy Usov ("Plaintiff" or "Usov") and Defendants Marc Lazar ("Lazar") and Marc Lazar, Inc. ("MLI," together with Lazar, "Defendants").
MLI has moved pursuant to Rule 56 of the Federal Rules of Civil Procedure ("FRCP") for summary judgment dismissing Plaintiff's complaint. MLI has additionally moved to quash two non-party subpoenas served by Plaintiff.
Plaintiff has moved pursuant to FRCP Rule 15(a)(2) to file an amended complaint ("Amended Complaint") against Defendants. Plaintiff has additionally moved, by letter motion, for clarification on and to compel discovery.
For the reasons set forth below, MLI's motion for summary judgment is denied and motion to quash is granted. Plaintiff's motion to file an amended complaint is granted in part and denied in part. Discovery is ordered to proceed.
Familiarity with prior proceedings is assumed and were set forth in the June 18, 2013 opinion (the "June 18 Opinion") granting in part and denying in part Defendants' motion to dismiss.
The June 18 Opinion dismissed Plaintiff's first two counts - breach of contract and unjust enrichment - against Lazar individually, but sustained them as to MLI. The June 18 Opinion also dismissed the third count for breach of covenant of good faith and fair dealing, the fourth count for replevin, and the fifth count for conversion in their entirety, and granted Plaintiff leave to replead within twenty (20) days.
Plaintiff asserts that, due to ongoing settlement negotiations, he did not amend his first complaint (the "Initial Complaint") within the time period allotted by the Court for Plaintiff to replead in order so that he might avoid running up legal expenses. Because settlement negotiations were ultimately unsuccessful, however, Plaintiff sought Defendants' consent for an extension of time to replead. Defendants' declined to grant consent.
On January 24, 2014 Plaintiff requested for leave to serve and file an amended complaint, which was opposed by MLI.On February 25, 2014, the parties stipulated and agreed that Plaintiff would file a motion to amend the complaint, along with a proposed amended complaint.
On April 17, 2014, MLI moved to quash two subpoenas served by Plaintiff on two non-parties Malca-Amit USA, LLC and Credit Suisse, AG. On April 30, 2014, MLI filed its motion for summary judgment.
On June 27, 2014 Plaintiff filed, by letter motion, a request for clarification as to whether a stay of discovery had been imposed pending the resolution of its motion to amend and, in the absence of a stay, to compel discovery.
MLI's motion for summary judgment and motion to quash, and Plaintiff's motion to amend, were heard and marked fully submitted on June 11, 2014. Plaintiff's motion for clarification and to compel was marked fully submitted on July 23, 2014.
The facts for purposes of MLI's summary judgment motion have been set forth in MLI's Rule 56.1 Statement and thePlaintiff's objection to MLI's Rule 56.1 Statement. The facts described below are undisputed except as noted.
According to MLI, this action involves a dispute over the interest in and ownership of certain diamonds acquired by MLI from Andre Runte (the "Diamonds," for the purposes of MLI's summary judgment motion). Plaintiff disagrees, but only to the extent Plaintiff claims the Diamonds were acquired from Andre Runte jointly by MLI and Harvey Harris ("Harris"), who was Plaintiff's predecessor-in-interest.
Harris allegedly owned a two-thirds interest in the Diamonds. Harris allegedly assigned his interest in the Diamonds to Pinnacle Trading Limited ("Pinnacle"). Pinnacle allegedly assigned its interest in the Diamonds to Mervia Investments SA ("Mervia"). Mervia allegedly assigned its interest in the Diamonds to Plaintiff.
According to MLI, Plaintiff alleges that Harris paid the full purchase price of $1.1 million for the acquisition of the Diamonds. According to Plaintiff, his allegation is that that Harris paid for his interest in the Diamonds but does not allege that Harris paid the entire purchase price of $1.1 million, which he feels is a matter for discovery.
According to MLI, Plaintiff alleges that "Harris was responsible to fund the purchase and did so with the proceeds from the sale of the 8.36 carat fancy blue diamond (the 'Blue Stone') which he owned." Plaintiff's contention is that his share of the funds used to acquire the Diamonds came from the proceeds of the sale of the Blue Diamond which was owned by Harris, but the specific details regarding the payment for the Diamonds are the subject of ongoing discovery.
MLI contends that Plaintiff alleges that Harris gave MLI the Blue Stone on consignment and that they agreed that instead of MLI paying Harris for the sale, MLI was to use Harris' share of the proceeds to fund the purchase of the Diamonds. Plaintiff contends that his share of the funds used to acquire the Diamonds came from the proceeds of the sale of Blue Stone, though the specific details regarding the payment for the Diamonds are the subject of ongoing discovery.
According to MLI, MLI paid Runte the price to obtain the Diamonds from Runte. Plaintiff contends that the money received by Runte for the Diamonds came from Defendant, but that Harris contributed to those funds used to acquire the Diamonds.
According to MLI, MLI did not use the proceeds from the Blue Stone to purchase the Diamonds from Runte. According to Plaintiff, the Blue Stone, which was owned by Harris, was sold in 2005 for $1,479,000 and that a portion of those proceeds were paid to Runte as part of the purchase price for the Diamonds. MLI contends that it paid Harris approximately $1,250,000 from the proceeds of the Blue Stone. Plaintiff asserts that the Blue Stone was sold in 2005 for $1,479,000, not $1,250,000, and that a portion of those proceeds were paid to Runte as part of the purchase price for the Diamonds.
MLI contends that Plaintiff acknowledges that other than the claimed payment by way of the Blue Stone, Harris did not make any payment towards the purchase of the Diamonds from Runte. According to Plaintiff, a portion of the proceeds from the sale of the Blue Stone were paid to Runte as part of the purchase price for the Diamonds, though additional money could also have been paid by Harris.
According to MLI, while Harris or his companies, Pinnacle or Mervia, should have made the requisite payment on time and could make the requisite payment late at MLI's sufferance, MLI was willing to accept late payment of the requisite amount but only up to the time of the lawsuit beingcommenced. According to Plaintiff, all amounts required to be paid by Harris pursuant to his agreement with MLI were made.
According to MLI, the ability to make payment is no longer available to Harris or his successors, since the Plaintiff sued MLI and MLI terminated the gratuitous extension of the ability to make the investment late. Plaintiff again contends that all amounts required to be paid by Harris pursuant to his agreement with Defendant were made.
According to MLI, the document that Plaintiff presents evidencing the assignment from Mervia to Plaintiff shows that the most valuable diamond, the 3.16 carat round stone which was improved by polishing to 2.99 carats, was never assigned to Plaintiff. Plaintiff contends that the 2.99 carat diamond was originally owned by Harris, and Harris' interest was subsequently assigned and transferred to Pinnacle, then to Mervia, and then to Plaintiff. Plaintiff further asserts that MLI's president, Marc Lazar, has admitted that MLI owes Plaintiff the proceeds from the sale of the 2.99 carat diamond.
Plaintiff contends that Harris owned a two-thirds interest in the Diamonds and paid valuable consideration to MLI for that interest. Plaintiff further asserts that, in December2007, MLI sold two diamonds - a fancy intense pink diamond for $537,950 and a fancy intense blue diamond for $192,400 - and that MLI paid Pinnacle, as Harris' successor-in-interest, two-thirds of the proceeds from the sale of those two diamonds, which constituted partial performance under the agreement by MLI.
According to Plaintiff, in March and April of 2012, MLI sold three diamonds which Plaintiff owned a percentage of. Those three diamonds were a 0.57 carat fancy grayish violet, natural color, round brilliant, a 1.75 carat diamond, and a 2.99 carat purplish-red round brilliant diamond for a total price of approximately $5,000,000. Plaintiff contends that Lazar admitted that MLI owned Plaintiff $3,500,000 "give or take" from the sale of those diamonds.
Plaintiff alleges that MLI is holding several million dollars worth of diamonds which Plaintiff owns a two-thirds interest in.
Familiarity with facts as alleged in the initial Complaint filed by Usov on February 5, 2013 is assumed and wereset forth in the June 18 Opinion granting in part and denying in part Defendants' motion to dismiss.
The Amended Complaint includes allegations not present in the Initial Complaint, namely in support of its fraud and veil-piercing claims. The new factual allegations of the Amended Complaint are assumed to be true and are summarized herein only to the extent necessary to dispose of Plaintiff's motion to amend.
For at least a decade, MLI has maintained an account with Bank Leumi USA ("Bank Leumi") in New York (the "Bank Leumi Account"). (Compl. ¶ 101.) Upon...
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