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Ainbinder v. Money Center Financial Group, Inc.

United States District Court, E.D. New York

March 24, 2014

ROBERT AINBINDER, CECILIA MACKIE, Plaintiffs,
v.
THE MONEY CENTER FINANCIAL GROUP, INC., NATHAN HINGSON, MICHAEL DEMCHAR, MICHAEL DESPOSITO, MGM CAPITAL, MARGARET DESPOSITO, MICHAEL HARMON, Defendants.

ORDER

SANDRA J. FEUERSTEIN, District Judge.

On November 16, 2010, pro se plaintiffs Robert Ainbinder ("Ainbinder") and Cecilia Mackie ("Mackie") (collectively, "plaintiffs") commenced this action against defendants The Money Center Financial Group, Inc. ("The Money Center"), Nathan Hingson ("Hingson"), Michael Demchar ("Demchar"), Michael Desposito ("Michael Desposito"), Margaret Desposito ("Margaret Desposito"), MGM Capital ("MGM"), and Michael Harmon ("Harmon") for breach of contract, unjust enrichment, conversion, damages to reputation, emotional distress, conspiracy, and conspiracy to commit fraud. [Docket Entry No. I]. On March 25, 2013, a default judgment was entered against The Money Center. [Docket Entry No. 100]. On February 11, 2014, a default judgment was entered against Hingson. [Docket Entry No. 123]. The Court now considers plaintiffs' claims for damages against The Money Center and Hingson based upon breach of contract and damage to reputation.

I. Background[1]

A. Factual Background

In January 2009, Ainbinder was contacted by a friend about a business venture with Michael Desposito who was seeking commercial real estate projects in need of funding. (Compl. ¶ 12). Ainbinder's business was to facilitate the funding for commercial real estate projects between lenders and borrowers. ( Id. ¶ 13).

I. Mackie Project

The first project submitted by Ainbinder to Michael Desposito was for a property located in Williamsburg, Brooklyn, to be developed by Mackie ("Mackie Project"). ( Id. ¶ 16). On February 18, 2009, Michael Desposito forwarded to Ainbinder a term sheet for the Mackie Project from The Money Center, and signed by The Money Center's chief executive officer, Hingson ("Mackie Project Term Sheet"). (Id. ¶ 18). The Mackie Project Term Sheet, dated January 14, 2009, provided for a four million five hundred thousand dollars ($4, 500, 00.00) loan. ( Id. ¶ 17; Mackie Project Term Sheet, Compl. Ex. B). Mackie submitted a thirty thousand dollar ($30, 000.00) "consulting" fee to The Money Center/Hingson. ( Id. ¶ 19). On February 19, 2009, Mackie received a letter from The Money Center in which it committed to fund the Mackie Project ("Mackie Project Commitment Letter").[2] (Compl. ¶ 20; Mackie Project Commitment Letter, Compl. Ex. C). The Mackie Project Commitment Letter provides that "Palm Beach Management, LLC has an agreement with the borrower for a I% fee to be paid at closing." (Mackie Project Commitment Letter, at 6). Despite Mackie's repeated requests to either close the deal or refund her "consulting" fee, the Money Center did neither. (Compl. ¶¶ 25-26).

2. Caflo Project

On March 16, 2009, based upon an Ainbinder referral, The Money Center sent Caflo Real Estate Development, LLC ("Caflo") a term sheet signed by Hingson ("Caflo Project Term Sheet") for a fifty-five million five hundred thousand dollar ($55, 500, 000.00) loan for the acquisition and development of property located in Bronx, New York (the "Caflo Project"). (Caflo Project Term Sheet, Compl. Ex. F). On April 27, 2009, The Money Center sent Caflo a letter in which it committed to fund the Caflo Project with a sixty-five million dollar ($65, 000, 000.00) loan ("Caflo Project Commitment Letter"). (Compl. ¶ 37; Caflo Project Commitment Letter, Compl. Ex. G). The Calfo Project Commitment Letter provides for "a 2.5% fee for the brokers involved in the transaction to be paid at closing, " which "are identified as Palm Beach Management, LLC and MOM Capital, Inc." (Caflo Project Commitment Letter, at 6). Notwithstanding receiving twenty-five thousand dollars ($25, 000.00) in advance fees from Caflo, Hingson walked away from the Caflo Project. (Compl. ¶¶ 38-39).

B. Procedural History

On August 20, 2012, plaintiffs moved for default judgment against The Money Center. [Docket Entry No. 57]. On February 28, 2013, Magistrate Judge A. Kathleen Tomlinson issued a report and recommendation ("February 2013 Report") that: (I) default judgment be entered against The Money Center on plaintiffs' claims for breach of contract and damage to reputation; and (2) the calculation of damages against The Money Center be deferred until the case is resolved against Hingson. [Docket Entry No. 95]. On March 25, 2013, this Court adopted the February 2013 Report in its entirety, and entered a default judgment against The Money Center. [Docket Entry No. 100].

On March 1, 2013, plaintiffs moved for default judgment against Harmon, Margaret Desposito, and MGM. [Docket Entry Nos. 97-98]. On January 2, 2014, Magistrate Judge Tomlinson issued a report and recommendation ("January 2014 Report") that: (I) plaintiffs' motions for default judgment against Harmon, Margaret Desposito, and MGM be denied, without prejudice; and (2) plaintiffs be granted thirty (30) days to amend their complaint. [Docket Entry No. 115]. On January 23, 2014, this Court adopted the January 2014 Report in its entirety, denying plaintiffs' motions for default judgment against Harmon, Margaret Desposito, and MGM, and granting plaintiffs thirty (30) days to amend their complaint ("January 23, 2014 Order"). [Docket Entry No. 121].

On January 10, 2014, this Court ordered Hingson to show cause why a default judgment should not be entered against him for his repeated failure to appear at conferences or otherwise comply with the orders of Magistrate Judge Tomlinson. [Docket Entry No. 117]. On February 11, 2014, this Court entered a default judgment against Hingson. [Docket Entry No. 123].

On February 1, 2014, plaintiffs withdrew their remaining claims against Demchar, Michael Desposito, MGM, Margaret Desposito, ...


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