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Basher v. Madonna Realty Corp.

July 10, 2007

ABRAHAM (AVI) BASHER, PLAINTIFF,
v.
MADONNA REALTY CORP. AND RACHEL BASHER, DEFENDANTS.



The opinion of the court was delivered by: Dora L. Irizarry, United States District Judge

MEMORANDUM AND ORDER

Defendant Madonna Realty Corporation ("Madonna") seeks partial reconsideration of this court's January 19, 2007 opinion and order granting the defendants' motion to dismiss plaintiff Abraham (Avi) Basher's ("Plaintiff's" or "Abraham's") complaint against defendant Rachel Basher ("Rachel"--together with Madonna, "Defendants") but denying the motion to dismiss with respect to Plaintiff's unjust enrichment claim against Madonna. It is this latter denial that Madonna urges this court to reconsider.

For the reasons set forth below, Defendants' motion for reconsideration is granted. Upon reconsideration, Madonna is dismissed from this action.

I. Background*fn1

Plaintiff filed his original complaint on August 1, 2001, alleging a claim of unjust enrichment against Madonna. Subsequently, with leave of the court, Plaintiff filed an amended version of the complaint on December 23, 2003 (the "FAC"). The FAC added Rachel as a defendant and set forth unjust enrichment, fraud, conversion, and breach of fiduciary duty claims against her. In addition, the FAC alleged the following facts.

Abraham and Rachel were formerly married and had children together. Following their divorce, they continued living together and still regarded each other as husband and wife under Jewish law. In or about June of 1993, during a robbery, Abraham was shot in the head. Abraham suffered lasting mental and physical disabilities resulting from the head injury, and his reasoning ability and judgment were thus impaired. Rachel managed Abraham's personal and financial affairs following his injury.

On July 22, 1996, Abraham transferred certain real property (the "Property") to Madonna, a corporation he wholly owned. Subsequently,*fn2 Abraham's shares in Madonna were transferred to Rachel without an exchange of consideration. Rachel collected rent on the Property but failed to pay the mortgage and/or taxes, causing the mortgagee to foreclose. Following the sale of the Property, Rachel kept the proceeds of the sale after all liens were extinguished. Abraham alleged that, "through this chain of events, Rachel managed to purloin or simply steal" the Property from him because he was operating under a diminished mental capacity. (See FAC ¶¶ 27-28.)

Defendants moved to dismiss Plaintiff's FAC on February 17, 2004, asserting, inter alia, that Plaintiff failed to state a cognizable claim against Madonna and that Plaintiff's claims against Rachel were time-barred. In an opinion and order dated March 15, 2005, this court declined to dismiss the unjust enrichment claim against Madonna. However, the court granted dismissal of the fraud claim against Rachel but held in abeyance its decision on the balance of the claims against her, stating that the FAC did not furnish sufficient information to answer whether the statute of limitations had expired on these remaining claims. The court gave Plaintiff thirty days leave to either cure the defect by repleading his complaint or by submitting an affidavit or other evidence demonstrating that Plaintiff suffered from a mental disability sufficient to toll the applicable statutes of limitations.

On May 12, 2005, Plaintiff filed a second amended complaint (the "SAC"). In the SAC, Plaintiff did not allege any additional facts, but stated, in pertinent part, that "Rachel is . . . united in interest with Madonna" such that Plaintiff's claims against her should be deemed filed on August 1, 2001, the date Plaintiff filed his original complaint. (See SAC ¶¶ 17-19.) Plaintiff further alleged that, since 1993, he has lacked "the mental capacity to appreciate or protect his legal interests, to understand or abide by a statute of limitations, or to exercise appropriate judgment about his own personal affairs." (See SAC ¶¶ 11-13.)

Defendants moved to dismiss Plaintiff's SAC on June 20, 2005, again asserting that Plaintiff failed to state a cognizable claim against Madonna and that Plaintiff's claims against Rachel were time-barred. Plaintiff responded that the relevant statutes of limitations should be tolled, pursuant to section 208 of the New York Civil Practice Law and Rules (the "C.P.L.R."), due to Plaintiff's insanity. On February 17, 2006, this court determined that a fact-finding hearing was required on the issue of Plaintiff's mental state from July 1993 through December 30, 2003 (the "relevant period") in order to answer whether Plaintiff's mental disability was sufficient to toll the applicable statutes of limitations. The matter was referred to United States Magistrate Judge Viktor V. Pohorelsky for a hearing. This court further held in abeyance any decision on the issue of whether Plaintiff's SAC relates back to the date of the original complaint pursuant to Federal Rule of Civil Procedure ("F.R.C.P.") 15(c), as Plaintiff argued. (See February 17, 2006 Opinion and Order, footnote 4.)

Judge Pohorelsky, in a report and recommendation dated November 29, 2006 ("Recommendation"), set forth his finding that Plaintiff failed to establish that he was insane within the meaning of the C.P.L.R. during any part of the relevant period. On January 19, 2007, this court adopted Judge Pohorelsky's Recommendation in full and further held, based on Judge Pohorelsky's finding, that Plaintiff's claims against Rachel were time-barred. Consequently, the court dismissed Rachel from this action but reiterated its holding from its March 15, 2005 opinion and order that Plaintiff's unjust enrichment claim against Madonna survives Defendants' motion to dismiss.

Madonna now submits this motion for reconsideration of the court's January 19, 2007 opinion and order, requesting that the court dismiss Madonna from this action. Plaintiff opposes Madonna's request.

II. Discussion

A. Motion for ...


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