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Republic of Benin v. Beverly Mezei

September 20, 2011

REPUBLIC OF BENIN, PLAINTIFF,
v.
BEVERLY MEZEI, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John G. Koeltl, District Judge:

OPINION AND ORDER

INTRODUCTION

This case involves a dispute over a plot of land (the "Lot") owned by the Republic of Benin ("Benin" or the "plaintiff"). As discussed in the Court's earlier opinions in this case, officials of Benin purported to sell the Lot in 2004 to Robin Shimoff for $650,000. See Republic of Benin v. Mezei ("Benin II"), No. 06 Civ. 870, 2010 WL 3564270, at *2 (S.D.N.Y. Sept. 9, 2010), Republic of Benin v. Mezei ("Benin I"), 483 F. Supp. 2d 312, 313-314 (S.D.N.Y. 2007). In 2005, Shimoff sold the Lot to Beverly Mezei for $1,250,000. See id. Upon discovering the purported sale, Benin sued Shimoff and Mezei to void the deeds effecting these two conveyances.

In Benin II, the Court granted Benin's motion for summary judgment on the grounds that the 2004 sale violated the Statute of Frauds and the officials who entered into the transaction lacked authority to do so. Benin II, 2010 WL 3564270, at *3-7. The Court subsequently conducted a non-jury trial on July 18 and 19, 2011 to decide the four claims remaining in the case: Shimoff's claim that she is entitled to restitution of any benefit Benin received from the purported sale; Shimoff's claim of negligent misrepresentation against Alfred Koller, who represented himself to be Benin's attorney in the transaction; and Benin's and Mezei's claims against Koller for fraud. The Court now makes the following findings of fact and reaches the following conclusions of law.

LEGAL BACKGROUND AND FINDINGS OF FACT

I. Parties

1. The Republic of Benin is a foreign state. (Second Am. Compl. ("SAC") ¶ 1.)

2. Robin Shimoff, Beverly Mezei, and Alfred Koller are individuals who are citizens of the State of New York. (SAC ¶¶ 2, 3, 4.)

II. Witnesses

3. Shimoff, Koller, Jean-Francis Zinsou, and Bienvenu Alogninou Houngbedji testified at the trial.

4. The parties also entered into evidence deposition testimony from Joel Wassi Adechi and Barry Chasky.

III. Beninese Mission Personnel and Property

5. On October 1, 2004, Rogatien Biaou was the Foreign Minister of Benin; Thomas Guedegbe was the Director of Administration of Benin's Ministry of Foreign Affairs; and Joel Wassi Adechi was Benin's Ambassador to the United Nations. Ambassador Adechi served in that post from September 1999 to May 2005. (Tr. 248:3-7, 279:11-25; SAC ¶¶ 21, 23, 31.)

6. From 2005 to 2006, Dr. Idohou was Benin's ambassador to the United Nations. In September 2006, Ehouzou became ambassador. (Tr. 137:1-11, 207:8-9.)

7. Jean-Francis Zinsou has been Benin's Ambassador to the United Nations since November 2009. From May 2003 until his appointment as ambassador, Ambassador Zinsou was minister counselor in charge of political and legal affairs at Benin's permanent mission in New York (the "Mission"). In October 2008, he additionally served as charge d'affaires of the Mission. (Tr. 126:14-23, 128:9-14, 131:21-24.)

8. Bienvenu Alogninou Houngbedji is the current head of chancery for the Mission. (Tr. 162:7-9.)

9. The Ambassador to the Mission resides at a residence owned by Benin in Riverdale, New York (the "Residence"). (Tr. 130:24-131:8; SAC ¶ 1.)

10. The Lot is an undeveloped lot adjacent to the Residence. (Tr. 41:25-42:7; SAC ¶ 9.)

11. The Mission is housed at a separate location from the Residence, in an office in Manhattan, New York (the "Office"). (SAC ¶ 1.)

IV. Renovation-Related Work Prior to 2004

12. In December 2000, Benin retained Koller to act as "legal advisor to [the Mission] with respect to the renovation and reconstruction of [the Residence]" and "on such other matters as may be referred to [Koller] from time to time." The agreement between Benin and Koller called for an "initial relationship" of eighteen months. Koller was to be paid $5,000 per month for this work. Ambassador Adechi approved Koller's retention. (Pl.'s Ex. ("PX") 3, 14.)

13. In 1998, Koller was suspended from the practice of law in New York for failure to pay the required $350 semiannual fee. He remained suspended until sometime after October 1, 2004. According to Koller, he was unaware of the suspension when it occurred and he promptly sought reinstatement when he discovered it. (Tr. 103:13-20; 334:1-12; PX 7.)

14. Beninese law requires that the Mission make a request to the Ministry of Foreign Affairs when it wishes to retain an attorney. For administrative matters, the Foreign Minister can approve the request. For matters requiring a disbursement of money, the Foreign Minister must communicate the request to the Council of Ministers, which determines whether or not the request should be approved. (Tr. 227:6-230:4.)

15. From in or around November 2000 until sometime in 2001 or 2002, Eric Thomas performed renovation work on the Residence and on the Office as a construction contractor and through at least two companies, Exclusive Wear and Mission Procurement Inc. ("Mission Procurement"). Benin paid over $270,000 to Thomas, Exclusive Wear, and/or Mission Procurement in 2000 and 2001. (Tr. 84:3-9, 85:22-86:4, 248:13-23, 251:20-253:22; 260:22-24; 310:13-19; PX 12, 17, 24, 26.)

16. Koller incorporated Mission Procurement for Thomas. (Tr. 84:10-86:4; PX 19.)

17. Mission Procurement subcontracted work on the Mission to Distinct Hardwood Flooring for $58,700. Koller signed the contract for this work on behalf of Mission Procurement in August 2001. Koller did not disclose his signing of this contract to Adechi. (Tr. 87:24-88:19, 90:14-18, 94:8-12; PX 27.)

18. About two months later, Benin paid $120,000 to Mission Procurement for the woodwork on the first and second floor of the Mission. (PX 26.)

19. A company named Exodus USA ("Exodus") also performed work between 2001 and 2004. Benin paid Exodus at least $14,500 in October and December 2001 and at least $203,210 between August 2003 and February 2004. (Tr. 103:7-12, 260:6-262:3; PX 34, 64A, 64B, 64C, 64D, 64E, 64F, 64 G.)

20. Benin paid Koller at least $30,000 in five separate checks of $5,000 or $10,000each paid between April and October 2001. (PX 65A-65E.)

21. In or around February 2002, Koller sent a letter to Ambassador Adechi stating that "Eric Thomas . . . and I have not received any payment for many months." Koller enclosed an invoice indicating that he was owed $5,000 per month from September 2001 through February 2002, for a total of $30,000, although it appears that he did receive a payment of $5,000 in October 2001. Otherwise, Koller never requested payment from Benin. (Tr. 120:19-22; PX 65E; DX BB.)

V. Purported Sale of the Lot to Shimoff

22. Koller testified that Guedegbe called him at some point in the fall of 2003 requesting that he attend a meeting with Guedegbe, Ambassador Adechi, and Minister Biaou. According to Koller, Minister Biaou said at the meeting that Benin wanted to sell the Lot to pay contractors for work on the Residence. Koller claimed that Minister Biaou told him that Guedegbe "was fully authorized to conclude the transaction" if Biaou was not in New York at the time of the closing. (Tr. 118:13-119:23.)

23. Ambassador Adechi denied that he was ever at such a meeting or that he was contemporaneously aware of the purported sale. However, it is not credible that the Lot would be sold without the knowledge of the ambassador who was living in the Residence right next to the Lot.*fn1 (Tr. 262:4-262:19.)

24. Shimoff testified that she and her father, Jacob Selechnik, met with Koller, Guedegbe, and Ambassador Adechi in the spring or summer of 2004 to discuss the purchase of the Lot. It was represented to Shimoff ...


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