Plaintiff Funding Holding, Inc. v. Ugochukwu

74 Misc.3d 68

161 N.Y.S.3d 682

PLAINTIFF FUNDING HOLDING, INC., Doing Business as Law Cash, Respondent,

v.Uzoh UGOCHUKWU, Esq. and Uzoh Ugochukwu, P.C., Appellants, Jeffy Holley, Defendant.

2020-114 K C

Supreme Court, Appellate Term, New York, Second Dept., 2, 11, 13 Jud. Dist.

Decided on January 21, 2022

Law Office of Philip Akakwam, P.C. (Ugochukwu Uzoh of counsel), for appellants.

Auciello Law Group, P.C., for respondent (no brief filed).

PRESENT: THOMAS P. ALIOTTA, P.J., MICHELLE WESTON, WAVNY TOUSSAINT, JJ.

ORDERED that the order, insofar as appealed from, is reversed, without costs, and the cross motion by defendants Uzoh Ugochukwu, Esq., and Uzoh Ugochukwu, P.C. for summary judgment dismissing so much of the complaint as was asserted against them is granted.

Plaintiff, a corporation that provides funding for legal actions, commenced this action against defendants Uzoh Ugochukwu, Esq., and Uzoh Ugochukwu, P.C. (collectively "the Ugochukwu defendants") and defendant Jeffy Holley, asserting causes of action sounding in breach of contract, conversion, unjust enrichment and account stated. The complaint alleges that plaintiff and Holley had entered into two funding agreements, under each of which plaintiff, as purchaser of an interest in Holley's pending personal injury litigation against the City of New York, agreed to advance to Holley, as seller, a certain sum of money in exchange for Holley's agreement that repayment would be made from the proceeds of the personal injury action. The complaint alleges that Holley's personal injury action was settled, but that plaintiff did not receive any payments from the settlement proceeds. The complaint also alleges that the Ugochukwu defendants violated certain ethical rules for legal professionals by distributing the settlement proceeds and "refus[ing]" to pay plaintiff despite their knowledge of the funding agreements. Plaintiff moved for, among other things, summary judgment on so much of the complaint as was asserted against the Ugochukwu defendants. The Ugochukwu defendants cross-moved for summary judgment dismissing so much of the complaint as was asserted against them. By order dated November 25, 2019, the Civil Court, insofar as relevant here, denied the cross motion by the Ugochukwu defendants.

The court should have granted the branch of the cross motion by the Ugochukwu defendants seeking summary judgment dismissing the breach of contract cause of action asserted against them. The parties identified in the funding agreements are plaintiff and Holley. The agreements were signed by Holley, rather than the Ugochukwu defendants. The agreements further set forth plaintiff's remedies against Holley upon his defaults. An "Irrevocable Letter of Instruction"—in which Holley instructed his then attorneys, the Ugochukwu defendants, not to disburse any funds from Holley's portion of settlement or judgment proceeds without first paying plaintiff the amount due under the agreements—was signed by Holley only. The Ugochukwu defendants merely signed an "Attorney Acknowledgment," acknowledging receipt of the letter from Holley and stating that they would "honor" the funding agreements and follow Holley's written instructions with regard to the agreements. Because the foregoing documents do not identify the Ugochukwu defendants as parties to any contract with plaintiff and do not impose upon the Ugochukwu defendants any contractual obligations owed to plaintiff, the Ugochukwu defendants are entitled to judgment as a matter of law dismissing the breach of contract cause of action asserted against them (see Prospect Funding Holdings, LLC v. Paiz , 183 A.D.3d 486, 487, 124 N.Y.S.3d 685 [2020] ).

To establish a cause of action for conversion of settlement proceeds, a plaintiff must show "legal ownership or an immediate right of possession to specifically identifiable funds and that the defendant exercised an unauthorized dominion over such funds to the exclusion of the plaintiff's rights" ( DeMartino v. Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf, LLP , 189 A.D.3d 774, 776, 137 N.Y.S.3d 116 [2020] [internal quotation marks omitted]; see Berkovits v. Berkovits , 190 A.D.3d 911, 917, 141 N.Y.S.3d 84 [2021] ). Here, in support of their cross motion for summary judgment, the Ugochukwu defendants demonstrated, prima facie, that (1) defendant Uzoh Ugochukwu, Esq. (Uzoh) had requested the City of New York to make any check for the settlement proceeds jointly payable to Holley and Uzoh Ugochukwu, P.C. so that Uzoh would be able to facilitate the payment of plaintiff's share of the settlement proceeds; (2) upon receiving a check for the settlement proceeds, which was made payable to Holley only, Uzoh promptly contacted a manager of plaintiff seeking guidance as to how to make a payment to plaintiff; (3) after receiving no response from the manager or plaintiff, Uzoh contacted the manager again concerning the payment, "making it clear" that the check would be handed over to Holley by June 7, 2017 if the Ugochukwu defendants did not hear back from plaintiff; and (4) on June 16, 2017, after receiving no response from plaintiff, the Ugochukwu defendants "were forced" by Holley to hand over the check to him after Holley had agreed in writing to pay plaintiff the assigned portion of the proceeds. Plaintiff did not submit any evidence to rebut such showing or otherwise raise a triable issue of fact. Therefore, the Ugochukwu defendants are entitled to summary judgment dismissing the conversion cause of action asserted against them (see Jaybar Realty Corp. v. Armato , 175 A.D.3d 1391, 1394, 109 N.Y.S.3d 337 [2019] ; cf. Korn v. Sacco & Fillas LLP , 189 A.D.3d 624, 134 N.Y.S.3d 713 [2020] ; Schwartz v. Sayah , 72 A.D.3d 790, 791, 899 N.Y.S.2d 316 [2010] ; Brinkman v. Moskowitz , 38 Misc. 2d 950, 951, 238 N.Y.S.2d 876 [App. Term, 2d Dept. 1962] ).

"To prevail on a cause of action alleging unjust enrichment, a party must establish that it conferred a benefit upon the other party, and that the other party will retain that benefit without adequately compensating the first party therefor. The essential inquiry on any cause of action alleging unjust enrichment is whether it is against equity and good conscience to permit the party against whom it is asserted to retain what is sought to be recovered" ( Beaman v. Awaye Realty Mgt., LLC , 176 A.D.3d 1025, 108 N.Y.S.3d 881 [2019] [citation omitted]; see Whitman Realty Group, Inc. v. Galano , 41 A.D.3d 590, 592-593, 838 N.Y.S.2d 585 [2007] ).

Here, the Ugochukwu defendants established their entitlement to judgment as a matter of law dismissing the unjust enrichment cause of action asserted against them by demonstrating that they did not derive any benefit from the check for the settlement proceeds made payable to Holley only, and plaintiff failed to raise a triable issue of fact in opposition (see Sky Materials Corp. v. Frog Hollow Indus., Inc. , 125 A.D.3d 751, 752-753, 4 N.Y.S.3d 91 [2015] ; Bugarsky v. Marcantonio , 254 A.D.2d 384, 678 N.Y.S.2d 737 [1998] ).

The Ugochukwu defendants are also entitled to summary judgment dismissing the cause of action to recover on an account stated insofar as asserted against them, since "[a]n account stated assumes the existence of some indebtedness between the parties, or an express agreement to treat a statement of debt as an account stated" ( Shelly v. Skief , 73 A.D.3d 1016, 1016, 900 N.Y.S.2d 689 [2010] ; see Gurney, Becker & Bourne v. Benderson Dev. Co. , 47 N.Y.2d 995, 996, 420 N.Y.S.2d 212, 394 N.E.2d 282 [1979] ; M. Paladino, Inc. v. Lucchese & Son Contr. Corp. , 247 A.D.2d 515, 516, 669 N.Y.S.2d 318 [1998] ), which was not shown here (see Schaffer v. View At Dobbs, LLC , 65 Misc. 3d 133[A], 2019 N.Y. Slip Op. 51612[U], 2019 WL 5281175 [App. Term, 2d Dept., 9th & 10th Jud. Dists. 2019] ; Yellon v. Sirlin , 35 Misc. 3d 21, 24, 942 N.Y.S.2d 763 [App. Term, 2d Dept., 9th & 10th Jud. Dists. 2012] ).

Lastly, to the extent that the complaint alleges that the Ugochukwu defendants violated certain ethical rules, "an ethical violation will not, in and of itself, create a duty that gives rise to a cause of action that would otherwise not exist at law" ( Shapiro v. McNeill , 92 N.Y.2d 91, 97, 677 N.Y.S.2d 48, 699 N.E.2d 407 [1998] ; see Suttongate Holdings Ltd. v. Laconm Mgt. N.V. , 173 A.D.3d 618, 619, 106 N.Y.S.3d 1 [2020] ; Art Capital Group, LLC v. Neuhaus , 70 A.D.3d 605, 607, 896 N.Y.S.2d 35 [2010] ).

Accordingly, the order, insofar as appealed from, is reversed, and the cross motion by the Ugochukwu defendants for summary judgment dismissing so much of the complaint as was asserted against them is granted.

WESTON and TOUSSAINT, JJ., concur.

ALIOTTA, P.J., concurs in part and dissents in part and votes to modify the order, insofar as appealed from, by vacating so much thereof...