In a recent unpublished Kings County Supreme Court decision, Zucker v Waldmann, 2015 NY Slip Op 50055(U) (Sup. Ct. Kings County Jan. 23, 2015), the Court granted the plaintiff’s motion pursuant to CPLR § 2221(d)(2) to reargue the Court’s June 12, 2014 decision (the “prior decision”) which dismissed plaintiff’s unjust enrichment claims against Basel Group and dismissed the complaint entirely against Basel LLC for lack of personal jurisdiction. Upon reargument, the Court affirmed the dismissal of all claims against Basel LLC for lack of personal jurisdiction. But, the Court vacated its prior dismissal of the unjust enrichment and breach of contract claims as barred by the statute of limitations. Because of the jurisdictional ruling dismissing all claims against Basel LLC, only the claim for unjust enrichment against Basel Group was restored.
In his complaint, plaintiff alleged breach of contract against Basel LLC, and unjust enrichment and fraud against Basel LLC, The Basel Group and Ron Waldmann. According to the complaint, the plaintiff was approached by Waldmann with a business proposal involving the development of real property in the Republic of Georgia. On November 29, 2005, plaintiff signed an Investment Agreement with Basel LLC and forwarded it to Waldmann with a check for $500,000.00 made payable to Basel Group. Pursuant to the Investor Agreement, Basel LLC was obligated to develop and improve the property but the agreement did not specify a time in which this would be begin. According to a memorandum (the “Memorandum”) which was provided to the plaintiff with the Investor Agreement, pre-sales of the developed property were supposed to begin during the first quarter of 2006. No development to the property or pre-sales took place. According to the plaintiff, he kept in touch with Waldmann through May 2012 and Waldmann continuously blamed the economic crises and conditions in Georgia as the reasons why the property could not be sold or developed. The plaintiff filed a complaint in the Kings County Supreme Court on June 24, 2013.
In the Court’s prior decision, plaintiff’s breach of contract claims against Basel LLC were dismissed as time-barred because the complaint was filed more than six years from the time the cause of action had accrued. The Court had relied upon the defendant’s argument that the contract was breached when no pre-sales occurred in the first quarter of 2006 finding that the Memorandum was incorporated by reference into the Investor Agreement. The Court also dismissed plaintiff’s unjust enrichment claims finding that the claim was based on the same facts as the breach of contract claim and thus was also time-barred. The Court ultimately dismissed all claims against Basel LLC due to lack of personal jurisdiction because, as a foreign limited liability company, “it has not engaged in such a continuous and systematic course of doing business here that a finding of its presence in this jurisdiction is warranted.”
When a plaintiff brings a motion pursuant to CPLR § 2221(d)(2), it must be “based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion.” In bringing this motion, plaintiff argued that the Court misapprehended the law when it ruled that evidence of the oral agreement between the parties to litigate disputes in New York was inadmissible because of the parol evidence rule. Plaintiff argued that due to the lack of a merger clause in the Investor Agreement he was allowed, under New York law, to submit extrinsic evidence as the contract was not an integrated one. In this decision, the Court held that the Investor Agreement was a complete written instrument quoting a First Department Appellate Court decision which states “‘[w]hen a written agreement is clear and unambiguous on its face, extrinsic and parol evidence is not admissible to create an ambiguity.’” The Court found that the plaintiff had not submitted evidence or facts which demonstrated that Basel LLC engages in any continuous business activity in New York and without Basel LLC’s express written consent to jurisdiction it cannot be involuntarily subjected to New York jurisdiction. Thus, the Court affirmed the dismissal of all causes of action against Basel LLC for lack of personal jurisdiction.
Plaintiff also argued that the Court misapprehended the law when it ruled that the breach of contract claim against Basel LLC was time-barred. In this opinion, the Court held that the Court’s prior decision on the breach of contract claim erred when it determined that the Memorandum was incorporated by reference in the Investor Agreement. The Court held that in order for the Memorandum to be considered incorporated by reference into the Investor Agreement, “the agreement must specifically reference and sufficiently describe the documents to be incorporated such that they may be identified beyond all reasonable doubt” and it must be clear that the parties had knowledge and agreed to the incorporated terms. The Court found that the Investor Agreement only referenced the Memorandum to acknowledge that the plaintiff had received it and for no other reason. Therefore, there was no specific time for performance of the Investor Agreement and “the parties have a reasonable time to perform and a breach can only occur after the expiration of such reasonable time.” The Court declined to weigh in on what would be considered reasonable, holding that what is reasonable is a factual issue to be determined at trial. Even though the Court vacated the prior decision that the breach of contract claim was time-barred, jurisdictional decision rendered the reversal of this decision moot.
However, the Court found that, based upon its finding that the Memorandum was not incorporated by reference into the Investor Agreement, plaintiff may have a viable claim against Basel Group. An unjust enrichment claim does not depend upon a written contract and therefore, even though there was no contractual relationship between the plaintiff and Basel Group, plaintiff’s unjust enrichment claim arises from the alleged fact that plaintiff was instructed by Waldmann to pay the $500,000.00 to Basel Group and that the funds were actually paid to Basel Group. The Court vacated the dismissal of the unjust enrichment claim against Basel Group because, as with the breach of contract claim, there is a question of fact regarding when the claim accrued.