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Komolov v. Segal

Supreme Court of New York, New York County

August 14, 2013

Alexander KOMOLOV, Alskom Realty LLC, and High Value Trading, LLC, Plaintiffs,
David SEGAL, Mohamed Serry, Artique Multinational LLC, Artique International Ltd., and Segal & Segal Holding, LLC, Defendants. No. 651626/2011.

Editorial Note:

This decision has been referenced in a table in the New York Supplement.

The Law Office of Roman Popik, P.C., for plaintiffs.

Frankfurt, Kurnit, Klein & Selz, PC, for defendants.


Defendants David Segal, Mohamed Serry, Artique Multinational LLC (Artique Multinational), Artique International Ltd. (collectively, with Artique Multinational, the Artique Defendants), and Segal & Segal Holding, LLC move to dismiss the thirteenth cause of action in the Amended Complaint (the AC) pursuant to CPLR 3211.[1] Defendants' motion is granted for the reasons that follow.

Factual Background & Procedural History

This case has a tortured history.[2] On November 17, 2010, plaintiffs commenced an action in this court (Index No. 652042/2010) against a similar group of defendants (the First Action). The First Action was assigned to another Justice of this Court. The complaint in the First Action contained 26 causes of action arising from allegations of theft and fraud relating to artwork, jewelry, and the sale of a condominium. The court assumes familiarity with those allegations, which were discussed at length in that Justice's order dated May 12, 2011 (the May 2011 Order), in which he dismissed the entire complaint in the First Action on statute of limitations and statute of frauds grounds, among others. The vast majority of plaintiffs' allegations are not relevant to this decision. At issue on this motion are the allegations relating to the sale of the subject condominium, which is located in Columbus Circle in Manhattan.

In the First Action, plaintiff Alskom Realty LLC (Alskom) alleged that it sold the condominium to the Artique Defendants and that they failed to pay the full $4.1 million sale price. However, at the time the First Action was commenced, plaintiffs' counsel did not have a copy of the sale contract because he was not involved in the underlying transaction and was having difficulty obtaining it from Alskom's prior counsel, who was convicted, disbarred, and incarcerated for committing bank fraud. In fact, when the motion to dismiss the complaint in the First Action was briefed, it was undisputed that a sale contract existed, that the condominium had been transferred, and that there had been partial payment of the sale price. Yet, the May 2011 Order held that:

The breach of contract cause of action must fail because Alskom, as the purported transferor of the condominium, cannot provide any written agreement regarding the transfer and cannot even identify the entity to which the condominium [3] was transferred, which makes the agreement violative of the statute of frauds and unenforceable.

Id. at 18, citing RAJ Acquisition Corp. v. Atamanuk, 272 A.D.2d 164 (1st Dept 2000). Plaintiffs did not appeal the May 2011 Order, move to reargue or renew the motion to dismiss, file an amended complaint, or move to vacate the judgment that was entered in the First Action.

Instead, on June 13, 2011, plaintiffs commenced this action by filing a complaint with 16 causes of action that alleged virtually identical facts and claims as their complaint in the First Action. In an order dated November 3, 2011 (the November 2011 Order), this court held that the doctrines of res judicata and collateral estoppel bar this action and dismissed the case because " this is a repeat of an action brought before" the previous Justice. The court did not reach the merits of plaintiffs' allegations. Rather, the court took exception to plaintiffs' decision to file a new action. However, it should be noted that, unlike when the First Action was commenced, plaintiffs produced a copy of the contract for the sale of the condominium. See 11/3/11 Transcript, p. 8 (" plaintiffs obtained a copy of the contract of sale on May 19, 2011" [one week after the previous Justice dismissed the First Action and less than a month before this action was commenced] ).

This action was restored when, in an order dated June 12, 2012 (corrected June 18, 2012), the Appellate Division modified the November 2011 Order by reinstating all of plaintiffs' claims except the claim related to the condominium. See Komolov v. Segal, 96 A.D.3d 513 (1st Dept 2012). The Appellate Division held that the action should not have been dismissed because the previous Justice's May 2011 Order " should have been without prejudice since the claims in that action were dismissed for pleading deficiencies and not on the merits" but that " [c]ollateral estoppel does, however, bar plaintiffs' sixteenth cause of action alleging breach of contract in connection with the sale of a condominium since that claim was dismissed in the prior action for non-compliance with the statute of frauds." Id.

Approximately three months before the Appellate Division made this ruling, this court, in an order dated March 6, 2012 (the March 2012 Order), upon reargument, dismissed plaintiffs' conversion claims based on similar grounds to those relied on by the previous Justice in the May 2011 Order. However, in an order dated December 27, 2012, the Appellate Division modified the March 2012 Order by reinstating some of plaintiffs' conversion claims.[4] See Komolov v. Segal, 101 A.D.3d 639 (1st Dept 2012).

Earlier this year, after all of the events described above created confusion as to which of plaintiffs' claims were still at issue in this case, the court encouraged plaintiffs to file an amended complaint. On May 30, 2013, plaintiffs filed the AC. The AC's twelfth thorough sixteenth causes of action relate to the condominium: (12) a declaratory judgment as to the rights to the $4.2 million currently held in escrow from a subsequent sale that occurred in November 2012; (13) unjust enrichment (the only claim at issue on ...

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