& Neville LLP, New York (Barry R. Lax of counsel), for
Tagliaferri, respondent pro se.
Patricia J. Cornell, respondent pro se.
Schulte Roth & Zabel LLP, New York (Michael G. Cutini of
counsel), for IEAH Corporation, IEAH Stables, Inc.,
International Equine Acquisition Holdings, Inc. and Michael
Sweeny, J.P., Renwick, Mazzarelli, Manzanet-Daniels, JJ.
Supreme Court, New York County (Eileen Bransten, J.), entered
November 13, 2015, which granted defendants-respondents'
motions to dismiss the complaint as against them, unanimously
modified, on the law, to deny the motions as to the fraud,
breach of fiduciary duty, negligent misrepresentation,
constructive fraud, and aiding and abetting breach of
fiduciary duty claims as against Tagliaferri and Cornell, the
breach of contract claim against IEAH Corporation, IEAH
Stables, Inc., International Equine Acquisitions Holdings,
Inc. (collectively, IEAH), the aiding and abetting fraud and
breach of fiduciary duty claims against IEAH and Iavarone,
and the unjust enrichment claim against IEAH and Iavarone,
and otherwise affirmed, without costs.
light of the principles that, on a motion to dismiss pursuant
to CPLR 3211, the facts alleged in the complaint must be
accepted as true and the plaintiff afforded every favorable
inference and that, in the absence of a conclusive document,
neither the lack of evidentiary submissions to support the
plaintiff's claims nor the defendant's denials are
dispositive (see Leon v Martinez, 84 N.Y.2d 83');">84 N.Y.2d 83
), the motion court erred in dismissing the complaint
in its entirety.
fraud, negligent misrepresentation, and constructive fraud
claims (the fraud claims) as against Tagliaferri and Cornell,
even absent details of time and place, allege facts
sufficient to permit a reasonable inference of the alleged
misconduct, thereby meeting the heightened pleading
requirement of CPLR 3016(b) (see Eurycleia Partners, LP v
Seward & Kissel, LLP, 12 N.Y.3d 553');">12 N.Y.3d 553 ;
Board of Mgrs. of 411 E. 53rd St. Condominium v Dylan
Carpet, 182 A.D.2d 551');">182 A.D.2d 551 [1st Dept 1992]). The breach of
fiduciary duty and aiding and abetting claims, while alleging
a part of the entire alleged scheme, are based on particular
acts different from the alleged fraudulent acts and are not
duplicative of the fraud claims (see Bullmore v Ernst
& Young Cayman Is., 45 A.D.3d 461, 463 [1st Dept
fraud claim was correctly dismissed as against IEAH and
Iavarone. The complaint does not allege facts from which it
could be found that IEAH had a duty to disclose material
information to plaintiffs (see Mandarin Trading Ltd. v
Wildenstein, 16 N.Y.3d 173, 179 ).
complaint states a cause of action against IEAH and Iavarone
for aiding and abetting fraud and breaches of fiduciary duty
(see Oster v Kirschner, 77 A.D.3d 51');">77 A.D.3d 51 [1st Dept
2010]). Plaintiffs have adequately pleaded actual knowledge
and substantial assistance via allegations, inter alia, that
IEAH and Iavarone paid undisclosed and illegal kickbacks and
fees to the TAG defendants for "investment advisory
services" that were never provided, and that IEAH and
Iavarone paid commissions that were not a term of certain
convertible notes at issue. The complaint further alleges
that the TAG defendants created backdated invoices and
threatened to cut off IEAH's funding if it did not allow
TAG access to its books and records.
complaint states a cause of action for breach of contract
against IEAH. Contrary to IEAH's contention, the
complaint identifies the contract as the convertible notes,
to which plaintiffs claim they are third-party beneficiaries
(see NYAHSA Servs., Inc., Self-Ins. Trust v Recco Home
Care Servs., Inc., 141 A.D.3d 792, 797 [3d Dept 2016]).
The motion court erred in finding that this claim was
self-defeating since the conflicting statement was a quote
from an email, not an allegation.
there is a genuine dispute over the existence of the
contract, the unjust enrichment claim was properly pleaded in
the alternative to the contract claim (see Sabre Intl.
Sec., Ltd. v Vulcan ...