Menaker v. Alstaedter

• Decision Date: 16 November 1987
• Citation: Menaker v. Alstaedter, 521 N.Y.S.2d 35, 134 A.D.2d 412 (N.Y. App. Div. 1987)
• Parties: Hope Lynn MENAKER, etc., Appellant, v. Sara Anne ALSTAEDTER, et al., Respondents, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

Page 35

521 N.Y.S.2d 35

134 A.D.2d 412

Hope Lynn MENAKER, etc., Appellant, v. Sara Anne ALSTAEDTER, et al., Respondents, et al., Defendants.

Supreme Court, Appellate Division Second Department.

Nov. 16, 1987.

Liddle & O'Connor, New York City (Andrew S. O'Connor, Jeffrey L. Liddle and Owen D. Kurtin, of counsel), for appellant.

Fisher & Fisher, Brooklyn (Andrew S. Fisher and Stephen R. Geller, of counsel), for respondent Sara Anne Alstaedter.

D'Amato & Lynch, New York City (Robert E. Meshel and Patrick J. Maloney, of counsel), for respondent Alan E. Kahn.

Before WEINSTEIN, J.P., and RUBIN, KUNZEMAN and SULLIVAN, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, to recover damages for fraud, the plaintiff appeals from an order of the Supreme Court, Kings County (Lodato, J.), dated May 13, 1986, which granted the motion of the defendant Kahn and the cross motion of the defendant Alstaedter to dismiss the complaint insofar as it is asserted against them.

ORDERED that the order is modified, on the law, by deleting the provisions thereof which granted those branches of the motion and cross motion which were to dismiss paragraphs 16 through 21, and paragraph 22 (with the exception of the allegation that the conveyances in question were made with actual intent to defraud), of the first cause of action, and the second, third and fourth causes of action, and substituting therefor provisions denying those branches of the motion and cross motion; as so modified, the order is affirmed, with one bill of costs payable to the appellant by the respondents.

The defendants Alstaedter and Kahn, the respondents herein, sought to dismiss all five causes of action asserted in the complaint insofar as asserted against them pursuant to CPLR 3211(a)(7), contending that they were all based on fraud and that the plaintiff had not pleaded the causes with the sufficiency of detail required by CPLR 3016(b).

The first cause of action alleged fraudulent conveyances in violation of various sections of Debtor and Creditor Law article 10. Paragraphs 18 through 21 of the complaint alleged violations of Debtor and Creditor Law §§ 273, 273-a, 274 and 275 which do not require proof of an actual intent to defraud. Therefore it is unnecessary to plead such paragraphs with the particularity required by CPLR 3016(b) (see, 3 Weinstein-Korn-Miller, N.Y.Civ.Prac. p 3016.04; Feist v. Druckerman, 70 F.2d 333, 335). However, paragraph 22 of the complaint alleges a violation of Debtor and Creditor Law § 276 which, insofar as it alleges an actual intent to defraud (see, Marine Midland Bank v. Murkoff, 120 A.D.2d 122, 125-128, 508 N.Y.S.2d 17, appeal dismissed 69 N.Y.2d 875, 514 N.Y.S.2d 1029, 507 N.E.2d 322; Flushing Sav. Bank v. Parr, 81 A.D.2d 655, 656, 438 N.Y.S.2d 374, appeal dismissed 54 N.Y.2d 770, 443 N.Y.S.2d 61, 426 N.E.2d 752) was properly dismissed for failure to comply with CPLR 3016(b).

Nor does the plaintiff's second cause of action, alleging abuse of the privilege of incorporation, require such particularization of pleading (see, Walkovszky v. Carlton, 18 N.Y.2d 414, 420, 276 N.Y.S.2d 585, 223 N.E.2d 6, appeal after remand 29 A.D.2d 763, 287 N.Y.S.2d 546, affd. 23 N.Y.2d 714, 296 N.Y.S.2d 362, 244 N.E.2d 55).

CPLR 3016(b) does not apply to violations of Business Corporation Law § 720(a)(1), alleged in the third cause of action in plaintiff's complaint, because the prohibitions of that statute are not based on fraud (see, Rapoport v. Schneider, 29 N.Y.2d 396, 400, 328 N.Y.S.2d 431, 278 N.E.2d 642).

Finally, the payment of dividends and distributions in violation of Business Corporation Law §§ 510 and 719(a)(1), as alleged in plaintiff's fourth cause of action, is not based on fraud. Therefore, CPLR 3016(b) does not apply to that cause of action either.

Because the court predicated its dismissal of...