Exhibit,Appendix: Barry Hersko v. Morris Hersko, Sara G Hersko

On August 03, 2021 a Exhibit,Appendix was filed involving a dispute between Barry Hersko, and Morris Hersko, Sara G Hersko, for Real Property - Other (equitable mortgage) in the District Court of Kings County.

Preview
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS

BARRY HERSKO,

Plaintiff, Index No. 519449/2021

Vv. Hon. Karen B. Rothenberg

MORRIS HERSKO and SARA G. HERSKO, Motion Seq. Nos. 003, 004

Defendants.

PLAINTIFF’S MEMORANDUM OF LAW IN
IN OPPOSITION TO DEFENDANTS’ MOTION TO
DISMISS THE VERIFIED AMENDED COMPLAINT AND IN SUPPORT
OF DEFENDANT’S CROSS-MOTION FOR LEAVE TO AMEND COMPLAINT

BLANK ROME LLP

Craig M. Flanders
Samuel D. Levy
Rachel L. Cohn
1271 Avenue of the Americas
New York, New York 10020

Attorneys for Plaintiff Barry Hersko

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TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT .
FACTUAL BACKGROUND
A Plaintiff's Loans
B Defendants’ Default
Cc Litigation
ARGUMENT
POINT I LEAVE TO AMEND THE COMPLAINT SHOULD BE GRANTED
A The Original and Amended Complaints Have Placed Defendants
on Notice of Plaintiff's Claims
B Defendants Will Suffer No Prejudice
POINT II IN THE ALTERNATIVE, DEFENDANTS’ POST-ANSWER
DISMISSAL MOTION SHOULD BE CONVERTED TO A SUMMARY
JUDGMENT MOTION AND DENIED DUE TO THE EXISTENCE OF
SUBSTANTIAL FACTUAL QUESTIONS.
A The Court Should Convert Defendants’ Dismissal Motion to
Summary Judgment
B Defendants’ Motion for Summary Judgment Should be Denied
POINT III IN THE ALTERNATIVE, PLAINTIFF’S AMENDED COMPLAINT
IS VALID AND NOT SUBJECT TO DISMISSAL UNDER CPLR 3211 11
A Plaintiff Adequately Alleges Breach of Contract (Count I) 12
B Plaintiff Adequately Alleges a Claim for Constructive Trust
(Count II) 14
Cc Plaintiff's Unjust Enrichment Claim (Count III) is Valid 17
D. The Notices of Pendency Are Valid 19
E. Defendants’ Request for Sanctions Should be Denied 21
CONCLUSION 21

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TABLE OF AUTHORITIES

Page(s)

Cases

164 Mulberry Street Corp. v. Columbia Univ.
4 A.D.3d 49 (Ist Dep’t 2004)
551 W. Chelsea Partners LLC v. 556 Holding LLC,
40 A.D.3d 546 (1st Dep’t 2007) 20

AG Capital Funding Partners, L.P. v. State St. Bank & Tr. Co.
5 N.Y.3d 582 (2005) 12

Alvarez v. Prospect Hosp.,
68 N.Y.2d 320 (1986)

Aristy-Farer v. State of New York.
29 N.Y.3d 501 (2017) 11,12

August v. Schwartz,
50 Misc.3d 1224(A) (Sup. Ct. N.Y. Cnty. Mar. 1, 2016) 20

Bennett v. John,
151 A.D.2d 711 (2d Dep’t 1989) 19

Christina Condo. v. Lerner,
35 Misc.3d 1237(A) (Sup. Ct. Kings. Cnty. 2012) 21

Congregation Yetev Lev D’Satmar v. 26 Adar N.B. Corp.,
192 A.D.2d 501 (2d Dep’t 2007) 18

Coombs v. Jervier,
74 A.D.3d 724 (2d Dep’t 2010) 17

Cruz v. Brown,
129 A.D.3d 455 (1st Dep’t 2015)

In re Doe,
16 Misc.3d 894 (Sup.Ct. Kings Cnty. 2007) 15

Don y. Broger,
37 Misc.3d 1208(A) (Sup. Ct. Kings Cnty. 2012) 12

Emby Hosiery Corp. v. Tawil,
196 A.D.3d 462 (2d Dep’t 2021) 19

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Gandhi v. Filler,
15 Misc. 3d 1124(A) (Sup. Ct., Nassau Cty. 2007) 21

Gendler v. Guendler,
174 A.D.3d 507 (2d Dep’t 2019) 13

Giambrone v. Arnone,
197 A.D.3d 459 (2d Dep’t 2021) 11, 16

Hakmon v. 244 E. 48th Street Dev., LLC,
135 N.Y.S.3d 381 (Ist Dep’t 2020) 21

Hira v. Bajaj,
182 A.D.2d 435 (1st Dep’t 1992) 14

Ingrami v. Rovner,
847 N.Y.S.2d 132 (2007) 17

Jacobson v. McNeil Consumer & Specialty Pharm.,
68 A.D.3d 652 (Ist Dep’t 2009)
JP Morgan Chase Bank, N.A. v. Johnson,
129 A.D.3d 914 (2d Dep’t 2015)

JP Morgan Chase v. J.H. Elec. of New York, Inc.,
69 A.D.3d 802 (2d Dep’t 2010) 12

Korman v. Corbett,
183 A.D.3d 608 (2d Dep’t 2020) 12

Lake Valhalla Civic Ass’n v. Bmr Funding
194 A.D.3d 803 (2d Dep’t 2021) 20

Leon v. Martinez,
84 N.Y.2d 83 (1994) oo eeccccceeceeseseeseseeeeseseeseeeeeessseesesesesssseseeassessssesesassesesseseeesseseseseeeeaesneees 3,11

Lester v. Zimmer,
147 A.D.2d 340 (3d Dep’t 1989) 14

Lia v. Saporito,
909 F. Supp. 2d 149 (E.D.N.Y. 2012) 17

Makris v. Boylan,
109 N.Y.S.3d 134 (2d Dep’t 2019)

Mannino v. Passalacqua,
172 A.D.3d 1190 (2d Dep’t 2019) 17

iil

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MBIA Ins. Corp. v. Greystone & Co.,
74 A.D.3d 499 (Ist Dep’t 2010)
Mendel v. Hewitt,
161 A.D.2d 849 (3d Dep’t 1990) 14

Miller v. City Univ. of New York,
125 N.Y.S.3d 528 (Sup. Ct. N.Y. Cnty. Sept. 26, 2019)
Nina Penina, Inc. v. Njoku,
30 A.D.3d 193 (Ist Dep’t 2006) 20

NYAHSA Servs., Inc. v. People Care Inc.
156 A.D.3d 99 (3d Dep’t 2017)

O’Halloran v. Metro Transp. Auth.,
154 A.D.3d 83 (Ist Dep’t 2017)
Pinkava v. Yurkiw,
64 A.D.3d 690 (2d Dep’t 2009) 13

Piro v. Macura,
92 A.D.3d 658 (2d Dep’t 2012)

Reckson Operating P’Ship, L.P. v. New York Urban Dev. Corp.,
No. 00-6126, 2001 WL 1649258 (Sup. Ct. Suffolk Cnty. Sept. 18, 2001), 18

Ricco v. Genworth Financial,
184 A.D.3d 590 (2d Dep’t 2020) 12

Rich v. Lefkovits,
452 N.Y.S.2d 1 (1982)

Rosicki, Rosicki & Assocs., P.C. v. Cochems.
59 A.D.3d 512 (2d Dep’t 2009)

Seidenfeld v. Zaltz,
162 A.D.3d 929 (2d Dept. 2018) 14

Shrifter v. Goldman,
23 Misc.3d 1120(A) (Sup. Ct. Queens Cnty. 2009). 14

St. Nicholas W. 126 L.P. v. Republic Inv. Co., LLC,
146 N.Y.S.3d 612 (Ist Dep’t 2021)

Stern v. H. Dimarzo, Inc.,
19 Mise.3d 1144(A) (Sup. Ct. Westchester Ctny. 2008) 19

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Suissa v. Baron,
24 Misc.3d 1236(A), (Sup. Ct. Suffolk Cnty. 2009). 15

Team Star Contracting Inc. v. Dynamic Painting Corp.,
695 N.Y.S.2d 363 (2d Dep’t 1999)... ecececeeeseseeseseseeseseseesesessssesessessssseseessseseesesseeaeseees 9, 11

Terra CRG, LLC v. Marke,
34 Misc.3d 1243(A) (Sup. Ct. Kings Cnty. 2012) 19

Toobian v. Golzad,
147 N.Y.S.3d 61 (2d Dep’t 2021) 12, 13

Valdes v. Marbrose Realty, Inc.,
289 A.D.2d 28 (Ist Dep’t 2001)
Wesolowski v. St. Francis Hosp.,
968 N.Y.S.2d 181 (2d Dep’t 2013)

West Hempstead Water Dist. v. Buckeye Pipeline Co., L.P
152 A.D.3d 558 (2d Dep’t 2017) 21

Williams-Guillaume v. Bank of America, N.A.
130 A.D.3d 1016 (2d Dep’t 2015) 17

Zuckerman v. City of N.Y.,
49 N.Y.2d 557 (1980)

Statutes

22 N.Y.C.R.R. 130-1.1(c) 21

CPLR 105(u)

CPLR 213(1) 17

CPLR 3014. 18

CPLR 3025(b)
CPLR 3026. 11

CPLR 321 Loeeececeeeccececseseeeeseseescseseeseseessseseseseessseseesssesesacseeasseseeassesssiessassesseaesesesseseeeeseeeeseeeneeeee 2, 11

CPLR 3211 (a).
CPLR 3211 (a)(1) 11,15

CPLR 3211 (a)(5) cessccessssssssssssssssessssssessssssssssssssssesssssnssensesssnnsesenisessenssessensieesesseneseeed 8, 12
Vv

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CPLR 3211(a)(7) 9, 11,17

CPLR 3211(c)
CPLR 3212(b)
CPLR 3212(f)
CPLR 6501 19, 20

CPLR 6514... 20

CPLR 6514(a) 19

CPLR 6514(b) 19

CPLR 6515 21

N.Y. Gen. Oblig. Law 5-703(2) 12

N.Y. Gen. Oblig. Law 5-703(4) 12, 13

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Plaintiff Barry Hersko (“Barry” or “Plaintiff’) respectfully submits this Memorandum of

Law in support of his opposition to Defendant’s Motion to Dismiss the May 13, 2022 Verified

Amended Complaint and Cancel Notices of Pendency and for sanctions (the “Motion”), and in

support of his Cross-Motion for Leave to File a Second Amended Complaint (“SAC”). !

PRELIMINARY STATEMENT

This action is the inevitable result of Defendants’ inducing their uncle, Plaintiff Barry

Hersko, to provide four 2011-2014 loans totaling $700,000 for the purchase and debt service of

two Brooklyn properties, and their failure to repay the loan. Defendants promised to repay the

total loan by 2017 or, in the alternative, convey to Plaintiff title in one of the properties in partial

satisfaction of the loan, none of which occurred.

Barry commenced this 2021 action for breach of contract, constructive trust, and unjust

enrichment, and seeks leave to file the proposed SAC which clarifies the actual loan amount;

allegations about the bases for the loan; representations made to Plaintiff about the purpose and

Defendants’ lack of intent to repay the loan; and to include causes of action for promissory fraud

and negligent misrepresentation.

Defendants’ post-Answer dismissal motion should be denied as moot in light of the SAC

but, in the alternative, Defendants’ dismissal motion fails on its own merits. Defendants’ motion

includes significant documentary evidence outside the Amended Complaint, and should therefore

be treated as one for summary judgment, which similarly is not warranted because there exists

numerous material issues of disputed fact that discovery has yet to reveal, including the extent of

writings memorializing the loans; how and when Defendants used the funds from Plaintiff's loans;

' Capitalized terms not otherwise defined herein have the meanings set forth in the Amended
Complaint (Dkt. 32).

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and the extent to which the monies were used to facilitate Defendants’ purchase of the subject real

estate.

Even if considered under CPLR 3211, Plaintiffs claim for breach of contract survives

under the part performance exception to the statute of frauds because all parties engaged in part

performance of the loan agreement which, additionally, was memorialized by Plaintiff's counsel

escrow ledger expressly confirming the loan transfers. Plaintiff's constructive trust claim properly

alleges all necessary elements: namely that Plaintiff contributed funds to the properties and

Defendants promised to convey an interest in the same; this also renders valid Plaintiff's notices

of pendency. And Plaintiffs unjust enrichment claim seeks conveyance of title in a property that

may be pled in the alternative to breach of the oral contract, and is timely under New York’s six-

year statute of limitations for claims seeking equitable relief.

FACTUAL BACKGROUND

This lawsuit arises out of four separate loans to Defendants, who are Plaintiff's nephew

Morris and Morris’ wife Sara, to facilitate their purchase and/or mortgage payoff on two Brooklyn

properties. There is no dispute the loans were received by Defendants and not repaid.

A. Plaintiff’s Loans

On April 10, 2008, Defendants purchased a residential condominium located at 2039 57"

Street, Brooklyn, NY 11204 (the “Condo”). (Amended Verified Complaint (“Compl.”) Dkt. 32

4 17; May 13, 2022 Affirmation of Morris Hersko (“Morris Affirm.”) Dkt. 39 5) Two years later

on February 9, 2010, Defendants used the Condo for security to open a $300,000 credit line at TD

Bank (the “TD Mortgage”). (Compl. 4 18; Morris Affirm. {| 6)

Defendants intended the TD Mortgage to aid in the purchase of another property at 1963

63" Street, Brooklyn, NY 11204 (the “House”; together with the Condo, the Properties”) (Compl.

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4] 21; Morris Affirm. { 6), but needed more help in the form of a $190,000 loan from Barry, which

was made on November 28, 2011 (the “House Loan”). (Compl. § 19)

Defendants represented to Barry that they planned to sell the Condo and use sale proceeds

to repay the House Loan. (Oct. 12, 2022 Affirmation of Samuel D. Levy (“Levy Affirm.”) Ex. A,

SAC §f 18-19)? Defendants used Plaintiff's House Loan and a $450,000 Grand Bank NA

mortgage (the “Grand Bank Mortgage”) secured by the House to purchase the House on February

9, 2010. (Compl. § 20; Morris Affirm. §{] 6, 14)

Defendants later realized they were unable to simultaneously pay the Grand Bank

Mortgage and the TD Mortgage, upon which Defendants had drawn approximately $260,000, and

again turned to Plaintiff for help. (Compl. {| 23, 26) On or about March 5, 2012, the parties

entered into a second loan agreement whereby Plaintiff loaned Defendants $169,834.45

specifically to pay-down the TD Mortgage. Id. 24. A week later, on March 12, 2012, Plaintiff

made a third loan for $90,163.55 to further pay-down the TD Mortgage. Id. {| 25, 27-28. In

reliance on Defendants’ promise that the $260,000 would pay down the TD Mortgage to remove

the encumbrance on the Condo and facilitate sale of the Condo to repay the total loan amounts,

Plaintiff paid these amounts directly to TD Bank by check. (SAC ff 27-29) The reason the

$169,834.45 and $90,163.55 loans were in those specific amounts is because they were due by

Defendants to TD Bank, and transferred by Barry in those amounts as requested by Defendants.

? References to the proposed SAC, while such filing has not granted by the Court as of this
submission, still perform as an affidavit of Plaintiff Barry Hersko because the SAC as appended
to, and filed with Plaintiffs within opposition is verified by Barry; if the Court rejects the SAC,
still, the SAC allegations are verified and should be treated as Plaintiffs affidavit for purposes of
opposing the Motion. Leon v. Martinez, 84 N.Y.2d 83, 88 (1994) (“a court may freely consider
affidavits submitted by the plaintiff to remedy any defects in the complaint”); CPLR 105(u) (“A
‘verified pleading’ may be utilized as an affidavit whenever the latter is required.”).

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As of March 2014 Defendants again drew over $260,000 on the TD Mortgage. (Morris

Affirm. § 8) Continuing to carry two Properties beyond their means, Defendants requested an

additional $250,000 from Plaintiff to pay down the TD Mortgage. (SAC §fJ 32-33) Having not

been repaid the $450,000 already loaned, Plaintiff agreed to lend the additional funds only in

exchange for Defendants providing additional security; Defendants again represented that the loan

would pay down the TD Mortgage, unencumbering the Condo and allowing Defendants to sell the

Condo to repay the Loan. Id.§f] 33-34. Relying on these promises, Plaintiff loaned an additional

$250,000 indirectly to Defendants, paid in the form of a check to TD Bank. Id. 435.

In exchange for Plaintiff loaning the total $700,000, Defendants agreed to repay the debt

by 2017 or, in the alternative, convey to Plaintiff title in the Condo in partial satisfaction of the

loans. (Compl. § 30) All of the loan amounts were made by Barry directing his counsel, Avi

Weisel, to tender the payments from Barry’s escrow account to the Defendants, and all loans were

memorialized in the attorney’s escrow ledger. (SAC {ff 21, 28-29, 35)

B. Defendants’ Default

In or around March 2014, the parties learned the Condo was valued at less than the

$700,000 Plaintiff loaned Defendants, so the parties modified the loan agreement terms:

Defendants promised to pay Plaintiff $100,000 in 24 monthly $5,000 installments beginning

March 2014, and pay the $600,000 balance by 2017 or, in the alternative, convey title in the Condo.

Id.49 31-32; SAC ff 38-39.
Defendants partially performed by tendering four $5,000 checks (SAC §[ 41), but defaulted

in repaying the full $100,000 installment payments and the $600,000 full payment, as agreed.

(Compl. {ff 34-35) Further, Plaintiff was unable to deposit the four checks that Defendants

tendered because the bank informed Barry that the account from which they were drawn had

insufficient funds. (SAC § 42) Defendants refused to pay the remaining loan balance by its 2017

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maturity date, and have refused to convey the Condo title to Plaintiff. Id. 43-48; Compl. {fj 37-

39.

C. Litigation

Plaintiff initially retained attorney Abigail Shvartsman, PC, to sue on August 3, 2021

(Dkt. 1), with Kucker Marino Winiarsky & Bitten, LLP substituting as counsel on November 30,

2021, filing the Verified Amended Complaint on December 13, 2021. (Dkts. 30-32) Defendants

answered the Amended Complaint without verification on January 3, 2022 (Dkt. 34) and filed the

instant dismissal motion five months later on May 13, 2022 (“Mot.”), staying discovery that had

not yet begun. Undersigned counsel substituted to represent Plaintiffon June 30, 2022. (Dkt. 57)

ARGUMENT

POINT I

LEAVE TO AMEND THE COMPLAINT SHOULD BE GRANTED

Pursuant to CPLR 3025(b), “//J/eave [to amend] shall be freely given.” Courts consider

two factors when evaluating such requests: “(1) whether the original complaint gave the defendant

notice of the transactions or occurrences at issue and (2) whether there would be undue prejudice

to the defendant if the amendment and relation back are permitted.” O’Halloran v. Metro Transp.

Auth., 154 A.D.3d 83, 87 (1st Dep’t 2017).

“On a motion for leave to amend, plaintiff need not establish the merit of its proposed new

allegations, but simply show that the proffered amendment is not palpably insufficient or clearly

devoid of merit.” MBIA Ins. Corp. v. Greystone & Co., 74 A.D.3d 499, 500 (Ist Dep’t 2010)

(citations omitted). “No evidentiary showing of merit is required.” NYAHSA Servs., Inc. v.

People Care Inc., 156 A.D.3d 99, 102 (3d Dep’t 2017) (citing Cruz v. Brown, 129 A.D.3d 455,

456 (1st Dep’t 2015)); see also O’Halloran, 60 N.Y.S.3d at 130-31 (“party opposing leave to

amend must overcome a heavy presumption of validity in favor of [permitting amendment]”).

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A. The Original and Amended Complaints Have
Placed Defendants on Notice of Plaintiff’s Claims

The Verified Complaint allegations all relate to the same underlying transactions: Plaintiff

loaned Defendants hundreds of thousands of dollars to facilitate their House purchase and pay-

down their Condo mortgage, and Defendants failed to repay the loan amounts either in cash or by

conveying Condo title pursuant to the parties’ verbal agreement. As set forth in the proposed SAC,

Plaintiffs amended allegations and causes of action relate directly to, “restate or extrapolate on

allegations in the [current] complaint,” of which Defendants have been on notice since September

2021. Miller v. City Univ. of New York, 125 N.Y.S.3d 528, at *3 (Sup. Ct. N.Y. Cnty. Sept. 26,

2019).
Additionally, the Amended Complaint deprives the Court of important factual allegations

that bear upon the bases Defendants assert for their dismissal motion, which only recently became

known to Plaintiffs new undersigned counsel. (Levy Affirm. § 4) As set forth in the SAC, there

are disputed factual issues for which discovery is necessary; for example, the extent of writings

which evidence and memorialize the loans, which Defendants in their motion reject as illusory.

Such exchanges will refute any claim that the statute of frauds nullifies Plaintiffs breach of

contract claim (First Cause of Action, Dkt. 32), and the extent to which Defendants used the loaned

funds to make direct payments toward their purchase of the Condo and House, including paying-

down the TD Mortgage and Grand Bank Mortgage. (SAC fj 27-35)

B. Defendants Will Suffer No Prejudice

Prejudice exists where “‘a party incurs a change in position or is hindered in the preparation

of its case or has been prevented from taking some measure in support of its position, and these

problems might have been avoided had the original pleading contained the proposed amendment.”

Valdes v. Marbrose Realty, Inc., 289 A.D.2d 28, 29 (1st Dep’t 2001). “Prejudice does not occur

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simply because a defendant is exposed to greater liability or because a defendant has to expend

additional time preparing its case.” Jacobson v. McNeil Consumer & Specialty Pharm., 68 A.D.3d

652, 654-55 (1st Dep’t 2009) (internal citations omitted).

Defendants are not prejudiced by the SAC because the allegations pertain to the same

underlying transactions — Plaintiffs loan to Defendants to facilitate Defendants’ purchase of the

Properties. Discovery has not yet commenced and the case is in its infancy, so Plaintiffs proposed

SAC will not prolong or otherwise alter the scope of discovery. St. Nicholas W. 126 L.P. v.

Republic Inv. Co., LLC, 146 N.Y.S.3d 612, 613 (1st Dep’t 2021) (“[A]dditional discovery ... and

increased liability exposure does not result in prejudice where significant discovery is

outstanding.”).

Further, the proposed SAC is not palpably insufficient or clearly devoid of merit. The SAC

adds allegations that provide clarity of the facts and causes of action to the Amended Complaint

which, as explained in Point III below, contains meritorious claims. The additional causes of

action for promissory fraud and negligent misrepresentation allege that Defendants intentionally

and negligently provided Plaintiff with incorrect information about the Loan, and the proposed

SAC adequately alleges all necessary elements of each cause of action, and therefore are not

deficient on their face. Rosicki, Rosicki & Assocs., P.C. v. Cochems, 59 A.D.3d 512, 514 (2d

Dep’t 2009) (leave to add negligent misrepresentation claim granted where facially not devoid of

merit and not prejudicial); 164 Mulberry Street Corp. v. Columbia Univ., 4 A.D.3d 49, 55 (Ist

Dep’t 2004) (granting “leave to amend ... to add claims for negligent misrepresentation and

fraudulent misrepresentation on the basis of the facts already alleged’’).

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Accordingly, Plaintiff respectfully requests leave to file the proposed SAC, and that the

Motion therefore be denied as moot without prejudice to Defendants renewing their motion if they

find the SAC infirm.

POINT II

IN THE ALTERNATIVE, DEFENDANTS’ POST-ANSWER DISMISSAL
MOTION SHOULD BE CONVERTED TO A SUMMARY JUDGMENT MOTION
AND DENIED DUE TO THE EXISTENCE OF SUBSTANTIAL FACTUAL QUESTIONS

A. The Court Should Convert Defendants’ Dismissal Motion to Summary Judgment

CPLR 3211(c) provides, in relevant part:

(c) Evidence permitted; immediate trial; motion treated as one for
summary judgment. Upon the hearing of a motion made under
subdivision (a) or (b), either party may submit any evidence that
could properly be considered on a motion for summary judgment.
Whether or not issue has been joined, the court, after adequate notice
to the parties, may treat the motion as a motion for summary
judgment.

Dismissal motions filed after issue is joined should be converted to motions for summary

judgment. JP Morgan Chase Bank, N.A. v. Johnson, 129 A.D.3d 914, 915 (2d Dep’t 2015) (on

motion filed after issue was joined, “Supreme Court correctly determined that it should be treated

as a motion for summary judgment”) (citing Rich v. Lefkovits, 452 N.Y.S.2d 1, 4-5 (1982)); Piro

v. Macura, 92 A.D.3d 658, 660 (2d Dep’t 2012) (“defendant’s initial [CPLR 3211(a)(5)] motion
made after issue was joined should properly have been framed as one for summary judgment”).

Defendant’s CPLR 3211(a) motion was filed five months after Defendants answered the

Amended Complaint. (Dkts. 34, 38) Although discovery has not yet commenced, the Motion

includes significant documentary evidence beyond the four corners of the Amended Complaint

(Dkts. 39-53) which cannot be resolved in a dismissal or summary judgment motion. JP Morgan

Chase Bank, 129 A.D.3d at 915 (Supreme Court erred by not converting 3211(a) motion into one

for summary judgment even where “the parties’ evidentiary submissions were not so extensive as

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to make it unequivocally clear that they were laying bare their proof’ (internal quotations

omitted)); Makris v. Boylan, 109 N.Y.S.3d 134, 137 (2d Dep’t 2019) (“[W]here evidentiary

material is submitted and considered on a motion ... pursuant to CPLR 3211(a)(7), and the motion

is not converted into one for summary judgment, the motion should not be granted unless it has

been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless

it can be said that no significant dispute exists regarding it.”).

B. Defendants’ Motion for Summary Judgment Should be Denied

A summary judgment motion should be granted if, upon all the papers and proofs

submitted, the movant’s cause of action or defense is sufficiently established to warrant the Court

to direct judgment as a matter of law. CPLR 3212(b); Zuckerman v. City of N.Y., 49 N.Y.2d 557,

562 (1980). Defendants must make a prima facie showing of entitlement to judgment as a matter

of law by submitting evidence demonstrating the absence of a genuine issue of material fact. See,

e.g., Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324 (1986). Summary judgment must be denied

if a genuine issue of fact exists. Team Star Contracting Inc. v. Dynamic Painting Corp., 695

N.Y.S.2d 363, 364 (2d Dep’t 1999) (“mere conclusory denial of the [oral] contract’s existence is

insufficient” to demonstrate absence of triable issues of fact).

Defendants’ post-Answer Motion should be converted to summary judgment because

Defendants include documentary and collateral evidence: the Morris Hersko Affirm. and other

information and details beyond the Amended Complaint which purport to explain the basis for the

Loan, including whether it was required for the Condo or House purchases. Under CPLR 3212(f),

the Court should deny summary judgment because “facts essential to oppose the motion exist but

cannot then be stated.” Wesolowski v. St. Francis Hosp., 968 N.Y.S.2d 181, 183 (2d Dep’t 2013)

(“This is especially so where the opposing party has not had a reasonable opportunity for disclosure

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prior to ... the motion,” because dismissal motion “was made prior to the parties conducting

depositions”).

Numerous disputed issues of fact introduced in Defendants’ Morris Affirm. and its

accompanying exhibits preclude summary judgment. For example, discovery will reveal, among

other facts, the extent of writings among the parties memorializing the loans; promises made by

Defendants at the time they accepted each of the loan payments from Plaintiffs regarding

conveying Condo title if Defendants defaulted; Defendants’ intentions regarding repayment of the

loans, which discovery pertains to promissory fraud; and other facts and discovery that are entirely

unknowable to Plaintiff at this stage of the litigation.

What is clear from the dismissal motion is that Defendants do not deny receiving the Loan

funds, but dispute the payback terms. Defendants do not characterize the loans as gifts, and do not

deny the proceeds were received at and about the time of the Condo mortgage and House purchase.

Discovery will reveal exactly how and when Defendants used the loaned funds, and the extent to

which they were used to facilitate purchase of the Properties. Thus, Defendants’ claims that

“(i) Plaintiff did not loan $260,000.00 to my wife and I to ‘facilitate financing’ for the

condominium unit; and (ii) the TD Bank Loan was satisfied as of March 2014 with our funds, not

Plaintiff's,” and “any funds my wife and I received to ‘facilitate financing’ for 1963 63™ Street

came from Santander and Arc Home, and not Plaintiff,” are material issues of fact that are presently

in dispute. (Dkt. 39 4] 12, 24)
Discovery also will reveal what Defendants used the loans for, including written, verbal,

and other exchanges acknowledging Defendants requesting the funds; receiving the loans; and the

extent to which they were applied to the Properties. Such discovery also will reveal whether

Defendants had independent funds to purchase the Properties and whether such funds were used

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to facilitate purchase of the Properties, including the timing of Plaintiff's loans and the timing of

TD Bank mortgage repayments and monies used for the House purchase. If Defendants have

nothing to hide with regard to discovery of the funds they used to facilitate purchase of the

Properties, then Defendants should not resist such discovery.

Further, the documentary and affidavit evidence submitted by Defendants fails to

conclusively establish a defense as a matter of law, and Defendants’ motion for summary judgment

should be denied. Team Star Contracting Inc., 695 N.Y.S.2d at 364 (reversing grant of summary

judgment where triable issues of fact existed as to breach of contract claim).

POINT IIT

IN THE ALTERNATIVE, PLAINTIFF’S AMENDED COMPLAINT
IS VALID AND NOT SUBJECT TO DISMISSAL UNDER CPLR 3211

On a CPLR 3211 dismissal motion, “the pleading is to be afforded a liberal construction.”

See Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994) (citing CPLR 3026). The Court “must accept

the facts as alleged in the complaint as true, accord plaintiff
the benefit of every possible favorable

inference, and determine only whether the facts as alleged fit within any cognizable legal theory.”

Id.
“A motion pursuant to CPLR 3211(a)(1) to dismiss a complaint on the ground that a

defense is founded on documentary evidence may only be granted where the documentary

evidence utterly refutes the plaintiff's factual allegations, conclusively establishing a defense as a

matter of law.” Giambrone v. Arnone, 197 A.D.3d 459, 461 (2d Dep’t 2021). Further, when

“considering the sufficiency of a pleading subject to a motion to dismiss for failure to state a cause

of action under CPLR 321 1(a)(7), [the Court’s] well-settled task is to determine whether, accepting

as true the factual averments of the complaint, plaintiff can succeed upon any reasonable view of

the facts stated.” Aristy-Farer_v. State of New York, 29 N.Y.3d 501, 509 (2017) (internal

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quotations, citations omitted). Therefore, “if [the Court] determine[s] that plaintiffs are entitled to

reliefon any reasonable view of the facts stated, [the] inquiry is complete and [it] must declare the

complaint legally sufficient.” Id. Whether the “plaintiff

Case Info

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Document Filed Date

May 09, 2024

Case Filing Date

August 03, 2021

County

Parties

Barry Hersko Plaintiff
CARUSO, ANDREA JILL Attorney for the Defendant
COHN, RACHEL LINDSAY Attorney for the Plaintiff
DISTEFANO, SABRINA Attorney for the Defendant
FLANDERS, CRAIG MATTHEW Attorney for the Plaintiff
GENOVESI, ANTHONY J Attorney for the Defendant
MANDELL, JILL L Attorney for the Plaintiff
Morris Hersko Defendant
Sara G Hersko Defendant
SHVARTSMAN, ABIGAIL ESTHER Attorney for the Plaintiff
WIENER, MELANIE IRINA Attorney for the Defendant
CRAIG MOKHIBER Attorney
FRANCESCA ANNUNZIATA-ASLLANI Attorney
SHMUEL TAUB Attorney
SAMUEL LEVY Attorney
ABRAHAM WEISEL Attorney

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Exhibit,Appendix: Barry Hersko v. Morris Hersko, Sara G Hersko

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