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Holzer v. Mondadori

Supreme Court, New York County

August 26, 2013

Jane B. Holzer and CHARLES R. HOLZER, Plaintiffs,
Katherine Price Mondadori and ENRICO TODISCO GRANDE, Defendants.

Unpublished Opinion

Law Offices of Roger D. Olson, for plaintiffs.

Pavia & Harcourt LLP, for Mondadori.

Shirley Werner Kornreich, J.

Motion Sequence Numbers 002 and 003 are consolidated for disposition.

Defendant Katherine Price Mondadori moves to: (1) vacate the attachment entered by this court on June 26, 2012; and (2) dismiss the Complaint pursuant to CPLR 3211. Defendant's motions are granted for the reasons that follow.

Procedural History & Factual Background

This case arises from an alleged fraudulent scheme whereby Mondadori allegedly duped plaintiffs, Jane B. Holzer (Jane) and Charles R. Holzer (Charles), into buying luxury apartments in a building in Dubai that did not and does not exist. As this decision involves a motion to dismiss, the facts recited are taken from the Complaint.

In 2007, Mondadori and defendant Enrico Todisco Grande (Todisco) [1] solicited plaintiffs' investment in a luxury, high-rise condominium in Dubai known as "KPM Tower" (the Building). Complaint ¶¶ 7-8. Mondadori represented that the Building bore her initials, that "she was the creative force behind the design concept, " and that she "had personally developed the details and appointments of the residential units." ¶¶ 10-12. Defendants gave plaintiffs a 31-page marketing brochure (the Brochure) that depicts a 30-story tower and images of its luxury amenities, such as a rooftop spa and health club. ¶ 13. Mondadori's picture is featured on the Brochure's cover, which contains flowery language about her "trained eye", "international experiences", and "unique vision". ¶ 14. The Brochure also states that Mondadori "plans to occupy a penthouse in [the Building]." Id. At various meetings with plaintiffs, Mondadori and Todisco each represented that they owned numerous units in the Building that were available for purchase by investors and which could quickly be resold for a substantial profit. ¶ 16. Defendants told plaintiffs that they were presenting them with a unique, "insider" opportunity to purchase these units due to their personal friendship. Id.

Defendants offered to sell plaintiffs two units in the Building for $1 million per unit. ¶ 17. They allegedly gave plaintiffs explicit oral assurances that plaintiffs "could request — and receive — the return of the purchase money at any time." ¶ 19. Further, Todisco orally represented that he would "maintain plaintiffs' purchase monies as discreet funds pending the actual conveyance of the defendants' ownership interests to the plaintiffs." ¶ 20.

Plaintiffs purchased two units. On December 22, 2007, Charles wired $1 million to an account in Dubai and received a confirmation that the funds were "for KPM 2 and 3." ¶ 21. On May 7, 2008, Jane wired a second $1 million payment to Leonardo Commercial Brokers, LLC (Leonardo), a company supposedly owned by Todisco. ¶ 22. Immediately thereafter, defendants ceased communicating with plaintiffs. ¶ 23. Defendants refused to answer plaintiffs' phone calls and allegedly deactivated their email accounts. Id. Title to the units has not been transferred to plaintiffs and their $2 million has not been refunded. ¶¶ 24-25.

Plaintiffs commenced this action on March 30, 2012. Four causes of action are alleged: (1) breach of contract; (2) fraud/fraudulent inducement; (3) breach of fiduciary duty; and (4) unjust enrichment. On June 26, 2012, plaintiffs filed and the court granted a motion for an attachment of up to $2 million of Mondadori's assets. [2] See NYSCEF Doc No. 16. However, this action quickly came to a halt when, on July 5, 2012, Mondadori removed this action to the United States District Court for the Southern District of New York. The primary basis for removal [3] was the supposed applicability of the Federal Arbitration Act to the arbitration clauses in the written contracts (not mentioned in the Complaint, but discussed below). In an order dated March 14, 2013, Judge Buchwald remanded the case to this court because, inter alia, the individual defendants were not parties to the subject contracts and, therefore, not bound by the arbitration clauses. See NYSCEF Doc. No. 22.

On April 16, 2013, Mondadori filed the instant motions to dismiss the Complaint and to vacate the attachment. Mondadori submitted the written contracts (the Purchase Agreements) that govern the sale of the two subject units in the Building. The Purchase Agreements, which are virtually identical, are contracts between plaintiffs and Leonardo, not the individual defendants. [4] Charles signed his Purchase Agreement in May 2007 (approximately seven months before he wired his $1 million). Jane did not sign a Purchase Agreement before wiring her $1 million. Instead, she signed her Purchase Agreement in October 2008, approximately five months after she wired her funds and after she tracked down Mondadori in Italy.

The Purchase Agreements provide that "Within 30 days of this agreement the purchaser will chose [sic] among the units offered by the vendor from the highest to the lowest floor." Jane signed the Purchase Agreement even though she knew that Charles was never given the opportunity to select a ...

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