Shabat v. Schnaier

Shabat v Schnaier 2024 NY Slip Op 31425(U) April 22, 2024 Supreme Court, New York County Docket Number: Index No. 652778/2019 Judge: Debra A. James Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

INDEX NO. 652778/2019 NYSCEF DOC. NO. 103 RECEIVED NYSCEF: 04/22/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. DEBRA A. JAMES PART 59 Justice ----------------------------------------------------------------- ----------------X INDEX NO. 652778/2019 TAMIR SHABAT, MOTION DATE 11/30/2022 Plaintiff, MOTION SEQ. NO. 004 - V -

JOE SCHNAIER, SYLVIE SCHNAIER, and JOSEPH DECISION + ORDER ON COHEN, MOTION Defendants. ------------------------------------------------------------------- --------------X

The following e-filed documents, listed by NYSCEF document number (Motion 004) 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93,100 were read on this motion to/for JUDGMENT-SUMMARY

ORDER

Upon the foregoing documents, it is

ORDERED that to the extent that it seeks to dismiss the second

and third causes of action for unjust enrichment and for fraud,

respectively, against defendants Joe Schnaier and Slyvie Schnaier,

the motion of the defendants for summary judgment is GRANTED, and

such causes of action as against such defendants are DISMISSED;

and it is further

ORDERED that to the extent that it seeks to dismiss the first

cause of action for breach of contract against defendants Joe

Schnaier and Sylvie Schnaier, the third cause of action for fraud

against defendant Cohen, the fourth cause of action for breach of

fiduciary duty against defendant Cohen, and the fifth cause of

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action sounding in negligent misrepresentation against defendant

Cohen, the defendants' motion of summary judgment is DENIED; and

it is further

ORDERED that the cross-motion of the plaintiff TAMIR

SHABAT, for summary judgment, is DENIED; and it is further

ORDERED that counsel are directed to post on NYSCEF a proposed

preliminary conference order or competing proposed preliminary

conference order(s) at least two days before May 14, 2024 on which

date counsel shall appear via Microsoft Teams unless such

appearance be waived by the court.

DECISION

The plaintiff Tamir Shabat ("Shabat") commenced this action

seeking the payment of a promissory note (NYSCEF Document Number

5, "the Note") executed by the defendants Joe Schnaier and Sylvie

Schnaier (the "Schnaiers").

It is undisputed that the Schnaiers received the proceeds

under the Note in the amount of $150,000, plus interest of $50,000,

from Shabat. Schnaiers do not deny that they never repaid any

amount under the Note. In addition, the Note bears an annual

interest that greatly exceeds the maximum allowed by law.

The Schnaiers move for summary judgment dismissing the

complaint, asserting that the Note is unenforceable, as usurious.

Shabat cross-moves for summary judgment for breach of the Note

against the Schnaiers, for unjust enrichment and fraud against all

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the defendants, and for breach of fiduciary duty and negligence

against Cohen.

Shabat alleges that the Schnaiers' co-defendant Joseph Cohen

("Cohen") facilitated the transaction between the Schnaiers and

Shabat. Shabat submits text messages that evidence that Cohen

proposed the Note's usurious terms after Shabat previously

declined to lend money to the defendants Joe Schnaier and Sylvie

(the "Schnaiers"). (NYSCEF Document Numbers 87 and 90.) In

addition, Shabat asserts that Cohen has represented him in multiple

transactions over a few years prior to proposing that Shabat make

the loan to the Schnaiers. Shabat further alleges, with some

documentary evidence, that Cohen represented Wantickets RDM LLC,

during the relevant time-period, which company he claims is owned

by defendant Joe Schnaier.

Defendants are not entitled to summary dismissal of the

complaint for breach of the Note, as Shabat has raised triable

issues as to the nature of Cohen's involvement in the transaction

and his relationship with the Schnaiers, as well as the role of

the attorney Shabat retained to draft the papers for the

transaction, who Shabat alleges acted as a mere scribe. Therefore,

issues whether the defendants should be estopped from asserting

usury as a defense must be tried before a fact finder. See

Abramovitz v Kew Realty Equities, Inc., 180 AD2d 568 (1 st Dept

1992) and Angelo v Brenner, 90 AD2d 131, 132 (3d Dept 1982). For

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the same reason, Shabat's cross motion for summary relief must be

denied.

Shabat's second and third causes of action for unjust

enrichment and fraud, respectively, as against the Schnaiers

duplicate his cause of action for breach of contract against them,

and therefore shall be dismissed. See Goldstein v CIBC World

Markets Corp, 6 AD3d 295 (1 st Dept 2004). Nor is his negligent

representation against the Schnaiers viable, as he does not allege

any special relationship with them. See Basis Pac-Rim Opportunity

fund v TCW Asset Management Co, 24 AD3d 538 (1 st Dept 2015).

However, the court finds that the breach of fiduciary duty

claim against defendant Cohen is adequately pled, as Shabat alleges

that defendant Cohen breached his duty as his former attorney by

later representing defendant Schnaiers, whose interests were

adverse to Shabat, his former client. See TVGA Engineering,

Surveying, PC v Gallick, 45 AD3d 1252, 1256 (4 th Dept 2007).

Likewise, Shabat states a viable cause of action of negligent

misrepresentation against Cohen. See RBS Citizens, NA v Thorsen,

71 AD3d 1108 (2d Dept 2010).

JJ- ~ JI - } ~ 20240422123929DJAME5D1A3703E7CE04CF6873E3E729FE92392

4/22/2024 DATE DEBRA A. JAMES, J.S.C.

~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

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