The opinion of the court was delivered by: Seybert, District Judge:
In this diversity action, Plaintiff Graystone Bank sued Defendants David and Malkie Neuberg (the "Neubergs"), the Neuberg Children's Trust (the "Trust" and, with the Neubergs, the "Neuberg Defendants"), and Ian and Trudy Rubinstein (the "Rubinstein Defendants") alleging constructive and actual fraud arising out of an alleged scheme to shield assets from Plaintiff. Both the Neuberg Defendants and the Rubinstein Defendants moved to dismiss the Complaint; for the following reasons, these motions are DENIED.
In 2008, Plaintiff lent Mr. and Mrs. Neuberg approximately $3.7 million. The loan was secured by a note (the "Note") and a mortgage (the "Mortgage") on a property known as 15 Hoover Street in Inwood, New York (the "Hoover Property"). The Hoover Property was owned by 15 Hoover LLC, a limited-liability company of which the Neubergs are members. (Compl. ¶¶ 7, 13-14.) In applying for the loan, the Neubergs submitted financial statements indicating that they owned two homes: a house in Lawrence, New York (the "Lawrence Property") and a condominium in Miami, Florida (the "Miami Property"). (Compl. ¶ 15.)
In early 2009, the Neubergs asked Plaintiff for permission to transfer 75% of their interest in 15 Hoover LLC--and thus the majority ownership in the Hoover Property, the property securing the Note--to Mr. Rubinstein. To help obtain Plaintiff's approval of the transfer, on April 2, 2009 Mr. Rubinstein gave Plaintiff a financial statement indicating that he owned a home in Woodmere, New York (the "Rubinstein Property"). (Compl. ¶¶ 17-19). This statement was false--just two weeks before he submitted the statement to Plaintiff, Mr. Rubinstein conveyed the Rubinstein Property to Mrs. Rubinstein, his wife, for no consideration. (Compl. ¶ 20.) In reliance on this false statement, and in exchange for Mr. Rubinstein's guarantee on the loan, Plaintiff approved the transfer of 15 Hoover LLC from the Neubergs to Mr. Rubinstein. (Compl. ¶ 21.)
At the same time Mr. Rubinstein was preparing to sign the guaranty, the Neubergs were preparing to transfer the Lawrence and Miami properties to the Trust (whose beneficiaries are the Neubergs' children) in an attempt to shield their assets from Plaintiff. The Neubergs executed a deed transferring the Lawrence Property on April 1, 2009 and a deed transferring the Miami Property on April 27, 2009. Neither deed was recorded until after Plaintiff approved the loan modification. The Lawrence deed was recorded on May 14, 2009 and the Miami deed was recorded on June 11, 2009. (Compl. ¶¶ 22-25.)
In January 2010, the Neubergs defaulted on the Note and Mortgage. The unpaid principal balance is approximately $3.6 million. Plaintiff commenced a foreclosure proceeding in New York Supreme Court, Nassau County, naming the Neubergs as borrowers and Mr. Rubinstein as guarantor. That action remains pending. (Compl. ¶ 26.)
Plaintiff asserts three causes of action: (1) against the Neuberg Defendants, a claim under Section 273 of New York's Debtor and Creditor Law ("Section 273") for constructive fraud;
(2) against the Neuberg Defendants, a claim under Section 276 of the Debtor and Creditor Law ("Section 276") for actual fraud; and (3) against the Rubinstein Defendants, a claim under Section 276 for actual fraud. For the following reasons, the Nueberg Defendants' and Rubinstein Defendants' motions to dismiss are denied.
I. Legal Standard on a Motion to Dismiss
To survive a Rule 12(b)(6) motion, a plaintiff must
plead sufficient factual allegations in the complaint to "state a claim [for] relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929, 949 (2007). The complaint does not need "detailed factual allegations[,]" but it demands "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. In addition, the facts pleaded in the complaint "must be enough to raise a right to relief above the speculative level." Id. Determining whether a plaintiff has met his burden is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009). However, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009).
Additionally, under Federal Rule of Civil Procedure 9(b), claims sounding in fraud are subject to a heightened pleading requirement. Under this standard, plaintiffs must "allege facts that give rise to a strong inference of fraudulent intent." Cohen v. Cohen, __ F. Supp. 2d __, 2011 WL 1157283, at *7 (S.D.N.Y. Mar. ...