Jeranek v. Gritzer, Index No. 4232/2014, 3/16/16 (Demarest, J.)

Breach of Contract; Statute of Frauds; Equitable Accounting; Breach of Fiduciary Duty; Fraud; Conversion; Unjust Enrichment; Punitive Damages.

By: Gregory Brown, Jr. | Staff Writer

Plaintiff Heather Jeranek and Defendant Kevin Gritzer purchased real property in Brooklyn, New York (“Fourth Avenue Property”), as tenants in common. Additionally, they opened a joint bank account at TD Bank (“TD Bank Account”) to deposit rent checks from the Fourth Avenue Property. Later, Defendant purchased all of the shares of Heights Realty, a New York corporation, which owned real property in Brooklyn, New York (“Fifth Avenue Property”). With Plaintiff’s knowledge, Defendant purchased Heights Realty with $40,000 from the TD Bank Account. At this time, Plaintiff was aware that only Defendant’s name would be on the Fifth Avenue Property deed. It was Plaintiff’s understanding that Defendant orally agreed to add her name to the Fifth Avenue Property deed at a later date; however, the parties did not effectuate a written agreement indicating this.

After Defendant later refused to add Plaintiff’s name to the Fifth Avenue Property deed, Plaintiff commenced a lawsuit against Defendant seeking an accounting of the income and expenses of Heights Realty, a disbursement of her alleged 50% share of Heights Realty’s profits, and damages as a result of Defendant’s breach of contract. Plaintiff alleged seven causes of action: breach of contract, equitable accounting, breach of fiduciary duty, fraud, conversion, unjust enrichment, and punitive damages. Defendant then moved for summary judgment, pursuant to CPLR § 3212(b), on the grounds that the oral agreement was barred as a matter of law by the statute of frauds.

The Court granted Defendant’s motion for summary judgment. First, the court ruled that the alleged oral agreement was subject to the statute of frauds because Plaintiff failed to meet the requisite elements of a joint venture. A joint venture requires an agreement between the parties to share in the profits and losses of the venture. Here, Plaintiff failed to allege the existence of such agreement. Additionally, the statute of frauds requires the parties to execute a signed agreement; otherwise, it is unenforceable. Here, there was no such agreement and it was therefore unenforceable. Since there was no signed writing by Defendant that satisfied the statute of frauds, the oral agreement was unenforceable.

Second, Plaintiff’s claim for equitable accounting was dependent on the unenforceable oral agreement, so the agreement could not be used to support Plaintiff’s claim. Third, since Plaintiff failed to establish the existence of a joint venture, the court ruled that no fiduciary relationship existed and, therefore, there could be no breach of such duty. Fourth, the Court found that Plaintiff’s fraud and unjust enrichment claims were duplicative of her failed breach of contract claim because the claims rely on the same facts as the breach of contract claim. Additionally, Plaintiff’s conversion claim was predicated on the failed breach of contract claim, so Plaintiff failed to allege a wrongdoing separate and distinct from the breach of contract claim. Lastly, the Court denied Plaintiff’s claim for punitive damages because her fraud claim was devoid of merit. Accordingly, Defendant’s motion for summary judgment to dismiss Plaintiff’s causes of action was granted.

Jeranek v. Gritzer, Index No. 4232/2014, 3/16/16 (Demarest, J.).

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