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Niedernhofer v. Wittels

United States District Court, S.D. New York

July 31, 2018

NEAL WITTELS, Defendant.

          OPINION & ORDER


         Plaintiff, John Niedernhofer ("Plaintiff), commenced this action on June 13, 2017 against Neal Wittels ("Defendant"), regarding the sale of a 1958 Lancia Aurelia B24S convertible (the "Lancia Car"). (See Compl., ECF No. 1.) Plaintiff alleges seven causes of action, including: (1) rescission; (2) breach of express warranty; (3) fraudulent misrepresentation; (4)

         fraudulent concealment; (5) negligent misrepresentation; (6) breach of good faith and fair dealing; and (7) unjust enrichment (See Id.) Before the Court is Defendant's motion to dismiss Plaintiffs Complaint pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 18.) For the following reasons, Defendant's motion to dismiss is DENIED.

         Background[1]Bring a Trailer Media LLC ("BAT") manages and operates a website ( dedicated to facilitating sales of motor vehicles between private sellers and third parties. (Id. ¶ 9.) In 2015, Defendant provided a description of a 1958 Lancia B24S convertible (the "Lancia Car") to BAT in an effort to sell the vehicle on their website. (Id. ¶¶ 12, 15.) The description stated, among other things, that the Lancia Car had no leaks and had a full restoration completed in 2009 costing over $100, 000. (Id. ¶ 16.) Defendant further represented that since its restoration, the Lancia Car had only been driven about 100 miles. (Id.) BAT placed this information in an advertisement to the website's visitors, along with approximately seventy photos of the car. (Id. ¶ 15.) The online auction for the Lancia Car was opened on December 15, 2015 and visitors were able to place bids for a period of seven days. (Id. ¶¶ 11, 14.)

         Motivated by the representations on BAT's website, Plaintiff placed what became the winning bid on the Lancia Car for $350, 000 on December 22, 2015. (Id. ¶ 20.) Following the close of the auction, Plaintiff and Defendant exchanged emails and later spoke on the phone to discuss the delivery of the Lancia Car to Plaintiff's residence in California. (Id. ¶¶ 23-24). During the phone call, Defendant again insisted that the car did not leak fluids and “that there [was] not a drop [of fluid] on the floor.” (Id. ¶ 25). On December 23, 2015, Defendant requested that Plaintiff overnight him a bank check in the amount of $25, 000 “as a sign of good faith.” (Id. ¶¶ 27.) Plaintiff agreed to Defendant's request and sent a check that same day. (Id. ¶ 28.) On December 29, 2015, Plaintiff wired the remaining balance of $325, 000 to Wittels (Id. ¶ 29.)

         On January 13, 2016, the Lancia Car was delivered to Plaintiff in California after he paid an additional $3, 150 to have the car transported from New York. (Id. ¶ 34.) Upon delivery, Plaintiff discovered numerous cosmetic defects on the vehicle, including, inter alia: (1) rust on the rear and front fenders; (2) blistering driver and passenger rocker panels with rust; (3) fuel filler area corrosion; and (4) rusted chrome around the windshield. (Id. ¶ 30.) Plaintiff also later discovered numerous mechanical defects, including, inter alia: (1) a corroded water inlet from the radiator; (2) leaking mechanical assemblies under the car; (3) leaking rear axle seals; (4) leaking axle boots spraying oil over the exhaust; and (5) potential brake failure due to oil leaking onto the brake shoes. (Id. ¶ 31.) Plaintiff asserts that none of these defects, either cosmetic or mechanical, were mentioned in the description or visible in the photographs in the BAT advertisement. (Id. ¶ 32.) Additionally, Plaintiff discovered that the car had been driven approximately 2, 253 miles since its restoration in 2009 and that the car “was not even road safe.” (Id. ¶¶ 43, 45.) This directly contradicted Defendant's previous statements that the car had only been driven 100 miles and that the car “runs and drives very well.” (Id. ¶ 45.)

         Disappointed by the Lancia Car's condition, Plaintiff emailed Defendant. (Id. ¶ 46.) The following day, the parties had a telephone conversation during which Plaintiff “objected to the quality and condition of the Lancia Car” and sought to return it to Defendant. (Id. ¶ 47.) Plaintiff then had the car inspected by a professional car restoration company, Classic Showcase, and their report revealed that the cost of repairs to cure the material defects on the car would be in excess of $100, 000. (Id. ¶¶ 50-52.) In February of 2016, through his attorneys, Plaintiff “again rejected the Lancia Car and revoked his acceptance, ” which was met by Defendant's refusal to rescind the contract or take back possession of the car and return Plaintiff's money. (Id. ¶¶ 53- 54.) Plaintiff initially filed an action in the Central District of California in April of 2016, but it was dismissed because the court lacked personal jurisdiction over Defendant. (Id. ¶¶ 56-58.) Plaintiff later refiled in Florida, where Defendant at one time resided. (Id. ¶ 59.) However, Defendant moved to dismiss on the grounds of forum non conveniens, lack of personal jurisdiction, and failure to properly effectuate service. (Id. ¶ 60.) On May 22, 2017, Defendant filed a declaration in the Florida action stating that he would consent to jurisdiction in the Southern District of New York based on his residency in Orange County. (Id. ¶ 62.) Following this statement, Plaintiff agreed to terminate the action in Florida and proceed with his claims in this Court. (Id. ¶ 63.) Plaintiff filed the present action on June 13, 2017. Defendant, proceeding pro se, subsequently moved to dismiss Plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).[2]


         To survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, [that] ‘state[s] a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists when “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Twombly, 550 U.S. at 555. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). “Although for the purposes of a motion to dismiss [a court] must take all of the factual allegations in the complaint as true, [it is] ‘not bound to accept as true a legal conclusion couched as a factual allegation.'” Id. (quoting Twombly, 550 U.S. at 555). “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Id. at 679.


         Plaintiff raises claims of (1) rescission; (2) breach of express warranty; (3) fraudulent misrepresentation; (4) fraudulent concealment; (5) negligent misrepresentation; (6) breach of good faith and fair dealing; (7) and unjust enrichment. Defendant maintains that dismissal is proper with respect to Plaintiff's first, second, sixth and seventh claims under the statute of frauds. Defendant further contends that Plaintiff has failed to plausibly allege claims that entitle him to relief with respect to Plaintiff's third, fourth, and fifth causes of action. The court will consider each of Defendant's arguments in turn.

         I. Statute of Frauds

         Defendant first moves to dismiss Plaintiff's rescission, breach of express warranty, breach of good faith and fair dealing, and unjust enrichment claims arguing that they are barred by the Statute of Frauds. Section 2-201 of the New York Uniform Commercial Code (“UCC”)[3] provides that:

“A contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker.”

N.Y. U.C.C. § 2-201(1).

         Defendant argues that no written contract exists between the parties and that as a result, Plaintiff is not entitled to set forth any contract claims. The use of this defense by Defendant is premature. “An affirmative defense, such as the Statute-of-Frauds argument, may be raised by a Rule 12(b)(6) motion only if the defense appears on the face of the complaint.” Sabilia v. Richmond, No. 11-CV-739 (JPO), 2012 WL 213656, at *7 (S.D.N.Y. Jan. 24, 2012). Moreover, a plaintiff is not required to affirmatively allege compliance with the statute of frauds in order to properly set forth a contract claim. Id.; see also Palmer v. A. & L. Seamon, Inc., 94-CV-2968, 1995 WL 2131, at *2 (S.D.N.Y. Aug. 13, 2015).[4] Nor is the Court “permitted to infer the lack of a writing simply because [Plaintiff] did not affirmatively allege one.” Id.

         Here, the absence of a written agreement is not clear on the face of the Complaint. Communications between the parties regarding the exchange of the Lancia Car took place on a third party's website as well as by email. It is possible that Plaintiff could demonstrate through the use of evidence that sufficient writings existed between the parties to satisfy the statute of frauds.

         Even if the absence of a written agreement was clear on the face of the Complaint, there are a No. of exceptions to the statute of frauds defense that may apply to the present action. The first exception likely applicable to this matter is the so-called “Judicial Admissions” exception contained in § 2-201(3)(b) of the N.Y. U.C.C. “Section 2-201(3)(b) states that even if there is no written contract, a contract is nonetheless enforceable “if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made.” Marvin Inc. v. Albstein, 386 F.Supp.2d 247, 252 (S.D.N.Y. 2005) (quoting N.Y. U.C.C. § 2-201(3)(b)). “Thus, if a party admits in its Answer or other pleading the existence of a contract otherwise unenforceable under the Statute of Frauds, the defense has been waived.” Boscov's Dep't Stores, LLC v. AKS International AA Corp., 01-CV-105880 (GWG), 2003 WL 21576405, at *5 (S.D.N.Y. July 11, 2003) (collecting cases). Here, Defendant has stated in his motion that he and Plaintiff entered into an oral agreement to purchase the car. (Def.'s Mot. to Dismiss (“Def.'s Mot.”) ¶ 2.) Such a statement may constitute a binding admission, rendering the statute of frauds defense unavailable to Defendant. See Amtrust N. Am., Inc. v. Safebuilt Ins. Servs., Inc., No. 15-CV-7505, 2016 WL 6561548, at *3 (S.D.N.Y. Nov. 3, 2016) (“A court can appropriately treat statements in briefs as binding judicial admissions of fact.”) (quoting Purgess v. Sharrock, 33 F.3d 134, 144 (2d Cir. 1994)).

         Section 2-201(3)(c) might also be applicable to the instant case. N.Y. U.C.C. § 2-201(3)(c). It provides an exception to the statute of frauds “ with respect to goods for which payment has been made and accepted or which have been received and accepted.” Id. Based on the facts in the Complaint, the transaction between the parties could likely satisfy both conditions; Plaintiff alleges he paid Defendant $350, 000 prior to the delivery of the Lancia Car to his home in California. (Compl. ¶¶ 27-28.) Taking such allegations as true, the statute of frauds would be inapplicable in the present action. See MGR Meats, Inc. v. Schweid, No. 10-CV-3068 (MKB), 2012 ...

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