Motion for Leave in John Doe v. Tobin And Dempf, Llp, Michael L. Costello , Esq.| Trellis.Law

On January 29, 2021 a Motion-Secondary was filed involving a dispute between John Doe, and Michael L. Costello , Esq., Tobin And Dempf, Llp, for Torts - Other Negligence (NIED) in the District Court of Albany County.

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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF ALBANY
----------------------------------------------------------------------X
JOHN DOE,

Plaintiff,

-against-

TOBIN AND DEMPF, LLP and MICHAEL L.
COSTELLO, ESQ.,

Defendants. Index No.: 901925-24
----------------------------------------------------------------------X
TOBIN AND DEMPF, LLP and MICHAEL L.
COSTELLO, ESQ.
MOTION #5
Third-Party Plaintiffs,

-against-

MERSON LAW, PLLC, JORDAN K. MERSON, ESQ.
and JESSE R. MAUTNER, ESQ.,

Third Party Defendants.
----------------------------------------------------------------------X

MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ TOBIN AND
DEMPF, LLP and MICHAEL L. COSTELLO, ESQ. MOTION TO DISMISS
PLAINTIFF’S VERIFIED COMPLAINT PURSUANT TO CPLR § 3211(a)(7) AND IN
SUPPORT OF PLAINTIFF’S CROSS-MOTION FOR LEAVE TO AMEND HIS
VERIFIED COMPLAINT PURSUANT TO CPLR §§ 3025(b) AND 203(f)

MERSON LAW, PLLC
Jordan K. Merson, Esq.
Jesse R. Mautner, Esq.
Attorneys for Plaintiff
950 Third Avenue, 18th Floor
New York, New York 10022
Phone: (212) 603-9100
Facsimile: (347) 441-4171
jmerson@mersonlaw.com
jmautner@mersonlaw.com

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TABLE OF CONTENTS

TABLE OF AUTHORITIES..........................................................................................................iii

PRELIMINARY STATEMENT.....................................................................................................1

STATEMENT OF RELEVANT FACTS........................................................................................4

MOTION TO DISMISS STANDARD............................................................................................4

LEGAL ARGUMENT.....................................................................................................................6

POINT I: PLAINTIFF’S COMPLAINT STATES COLORABLE CAUSES OF ACTION
AGAINST DEFENDANTS.................................................................................................6

1. Plaintiff’s Complaint Properly States Causes of Action for Fraud and Fraudulent
Inducement as to Defendants...................................................................................6

2. Plaintiff’s Complaint Properly States a Cause of Action for Aiding and Abetting
Fraud as to Defendants..........................................................................................10

3. Plaintiff’s Complaint Properly States a Cause of Action for Breach of Contract
as to Defendants....................................................................................................11

4. Plaintiff’s Complaint Properly States a Cause of Action for Intentional Infliction
of Emotional Distress as to Defendants..................................................................13

5. Plaintiff’s Complaint Properly States a Cause of Action for Negligent Infliction
of Emotional Distress as to Defendants..................................................................14

6. Plaintiff’s Complaint Properly States a Cause of Action for Breach of Promissory
Estoppel as to Defendants......................................................................................16

7. Plaintiff’s Complaint Properly States a Cause of Action for Breach of the
Covenant of Good Faith and Fair Dealing as to Defendants...................................17

POINT II: DEFFENDANTS’ CONDUCT PROXIMATELY CAUSED PLAINTIFF’S
DAMAGES.......................................................................................................................18

POINT III: PLAINTIFF’S CLAIMS FOR PUNITIVE DAMAGES ARE
MERITORIOUS...............................................................................................................19

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POINT IV: TO THE EXTENT THAT THIS COURT IS NOT INCLINED TO DENY
DEFENDANTS’ MOTION OUTRIGHT ON THE MERITS, IT MUST STILL BE
DENIED AS PREMATURE AS PLAINTIFF HAS DEMONSTRATED THAT
DISCOVERY WILL LEAD TO ADDITIONAL RELEVANT EVIDENCE AND FACTS
ESSENTIAL TO OPPOSE DEFNDANTS’ MOTION......................................................20

POINT V: TO THE EXTENT NECESSARY, PLAINTIFF’S CROSS-MOTION FOR
LEAVE TO AMEND THE COMPLAINT SHOULD BE GRANTED..............................21

CONCLUSION..............................................................................................................................22

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TABLE OF AUTHORITIES

Cases

34-06 73, LLC v. Seneca Ins. Co.
39 N.Y.3d 44, 52 (2022)................................................................................................11-12

Abrams v. Richmond County S.P.C.
125 Misc.2d 530 (1984)........................................................................................................5

Alfano v. Starbucks Corp.
2012 N.Y. Misc. LEXIS 2746, *18 (Sup. Ct. N.Y. Cty. 2012)............................................13

Allstate Inc. Co. v. Dawkins
52 A.D.3d 826, 827 (2d Dept. 2008)..........................................................................18, FN1

Ambac Assur. Corp. v. Countrywide Home Loans, Inc.
31 N.Y.3d 569, 578-579 (2018)............................................................................................6

Avnet, Inc. v. Deloitte Consulting LLP
187 A.D.3d 430, 432 (1st Dept. 2020)................................................................................10

Baumann v. Hanover Community Bank
100 A.D.3d 814, 816-817 (2d Dept. 2012).........................................................................13

Behar v. Glickenhaus Westchester Development, Inc.
122 A.D.3d 784 (2d Dept. 2014)...........................................................................................4

Brunache v. MV Transp., Inc.
151 A.D.3d 1011, 1014 (2d Dept. 2017).............................................................................13

Carbillano v. Ross
108 A.D.2d 776 (2d Dept. 1985).....................................................................................4, 14

Cherry v. Joseph S. Herbert & Co.
212 A.D.2d 203, 208 (1st Dept. 1995)................................................................................15

Choi v. Mann
104 A.D.2d 354 (2d Dept. 1984).....................................................................................5, 14

Conte v Frelen Assoc., LLC
51 A.D.3d 620, (2008)........................................................................................................21

COR Route 5 Co., LLC v. Penn Traffic Co. (In re Penn Traffic Co.)
524 F.3d 373, 379 (2d Cir. 2008)........................................................................................12

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Fielding v. Kupferman
65 A.D.3d 437 (1st Dept. 2009)............................................................................................5

Hartford Acci. & Indem. Co. v. Hempstead
48 N.Y.2d 218, 226 (1979).................................................................................................20

Gelaj v. Gelaj
164 A.D.3d 878, 879 (2d Dept. 2018)........................................................................18, FN1

Gonzalez v. 40 W. Burnside Ave. LLC
107 A.D.3d 542, 544 (1st Dept. 2013)................................................................................10

J.A. Lee Elec., Inc. v. City of New York
119 A.D.3d 652 (2d Dept. 2014).........................................................................................16

Johnson v. Proskauer Rose LLP
129 A.D.3d 59 (1st Dept. 2015)............................................................................................4

Klein v. Metropolitan Child Servs., Inc
100 A.D.3d 708, 711 (2d Dept. 2012).................................................................................14

L. Magarian & Co., Inc., v. Timberland Co.
245 A.D.2d 69 (1st Dept. 1997)............................................................................................5

Lacks v. Lacks
12 N.Y.2d 268 (1963)...........................................................................................................5

Laurie Marie M. v. Jeffrey T.M.
159 A.D.2d 52, 58 (2d Dept. 1990).....................................................................................20

Lawrence v. Miller
1 N.Y.3d 588 (2008)...........................................................................................................16

Lucido v. Mancuso
49 A.D.3d 220 (2d Dept. 2008)...........................................................................................21

Loomis v. Civetta Corinno Const. Corp.
54 N.Y.2d 18, 23 (1981).....................................................................................................21

Markowitz v. Friedman
144 A.D.3d 993, 996 (2d Dept. 2016).................................................................................11

Moorman v. Meadow Park Rehabilitation and Health Care Center, LLC
57 A.D.3d 788 (2d Dept. 2008)..................................................................................18, FN1

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Napoli v. St. Peter’s Hospital of Brooklyn
213 N.Y.S.2d 6 (1961)..........................................................................................................5

Niyazov v Bradford
13 A.D.3d 501, (2004)........................................................................................................21

O’Reilly v. Executone of Albany, Inc.
121 A.D.2d 772 (3d Dept. 1986).........................................................................................13

Pacific Carlton Development Corp. v. 752 Pacific, LLC
62 A.D.3d 677 (2d Dept. 2009).......................................................................................4, 20

Parsan v. Better Hope Holding LLC
2011 N.Y. Misc. LEXIS 4841, *14-15 (Sup. Ct. Queens Cty. 2011)..................................20

Prudential Ins. Co. v. Dewey Ballantine, Bushby, Palmer & Wood
80 N.Y. 2d 377, 384 (1992).............................................................................................9-10

Robert H. Law, Inc. v. Samuel Kosoff & Sons, Inc.
46 A.D.2d 724 (4th Dept. 1974)...........................................................................................6

Roland Pietropaoli Trucking, Inc. v Nationwide Mut. Ins. Co.
100 A.D.2d 680 (3d Dept. 1984)...........................................................................................5

Ross v. Louise Wise Servs.
8 N.Y.3d 478, 489 (2007)..............................................................................................19-20

Ruffino v. New York City Transit Authority
55 A.D.3d 817 (2d Dept. 2008)...........................................................................................20

Schlackman v. Robin S. Weingast & Associates, Inc.
18 A.D.3d 729 (2d Dept. 2005).............................................................................................5

T. Lemme Mechanical, Inc., v. Schalmont Cent. School Dist.
52 A.D.3d 1006 (3d Dept. 2008)...........................................................................................4

Taggart v. Costabile
131 A.D.3d 243, 252 (2d Dept. 2015)...........................................................................14-15

TIAA Global Investments, LLC v. One Astoria Square LLC
127 A.D.3d 75 (1st Dept. 2015)............................................................................................4

Town & Country Adult Living, Inc. v. Hearth at Mount Kisco
2021 N.Y. Misc. LEXIS 723, *14-15 (Sup. Ct. N.Y. Cty. 2021)........................................20

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Tradeshift, Inc. v. Smucker Servs. Co.
2021 U.S. Dist. LEXIS 187111, *12-13 (S.D.N.Y. 2021)....................................................7

Statutes

CPLR § 3025(b).............................................................................................................................21

Miscellaneous Sources

Restatement [Second] of Torts § 908..............................................................................................20

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PRELIMINARY STATEMENT

Plaintiff JOHN DOE (“Plaintiff”) submits this Memorandum of Law in Opposition to

Defendants’ TOBIN AND DEMPF, LLP (“T&D”) and MICHAEL L. COSTELLO, ESQ.

(“Costello”) (collectively, “Defendants”) Motion to Dismiss his Verified Complaint (the

“Complaint”).

Plaintiff is a child sexual abuse survivor. When he was ten (10) to thirteen (13) years old,

he was repeatedly, forcibly molested by a priest at and of the Roman Catholic Diocese of Albany,

New York (the “Diocese”). Plaintiff filed a lawsuit against the Diocese and others as a result

thereof. During the resulting litigation, the Defendants made representations to Plaintiff to get

him to settle his lawsuit. Those representations were false. The Defendants never paid Plaintiff

as they said that they would. This lawsuit followed.

Defendants’ motion must be denied because Plaintiff has properly pleaded every cause of

action that he has asserted against them based, in part, on the fact that the Complaint includes

allegations supported by specific details concerning the material misrepresentations and omissions

of fact that Defendants made to him during the settlement conferences that took place in his

underlying Child Victims Act (“CVA”) lawsuit against the Diocese and others (the “CVA

Lawsuit”).

Additionally, as the papers part of this motion sequence make clear, this is an

extraordinarily fact-specific matter rife with issues of fact that are impossible for this Court to

determine at this early, pre-discovery stage. For this reason, Defendants’ motion must also be

denied so that Plaintiff can take discovery to ascertain additional details surrounding Defendants’

conduct prior to, during, and after the aforementioned settlement conferences.

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Furthermore, Defendants’ repeated argument that there was no fraud because, “the

possibility that the Diocese might file bankruptcy was no secret”, is wrong and completely misses

the point. See McDermott Affirmation at ¶¶ 21 and 34. Plaintiff was explicitly told that if he did

not settle the CVA Lawsuit, the Diocese would file bankruptcy to avoid a jury trial. He was also

explicitly told that if he did settle the CVA Lawsuit, that he would be compensated and finally get

the closure that he needed to move forward with his life. Plaintiff thereafter settled the CVA

Lawsuit based upon Defendants’ representations. However, despite Defendants’ representations,

Plaintiff was never compensated. These critical facts were not acknowledged by Defendants’

motion and are, at best, a huge issue of fact improper for summary judgment, let alone a motion to

dismiss.

Furthermore, while Defendants attempt to distance themselves from their involvement in

the Diocese’s bankruptcy filing, it simply defies all logic that they, as counsel to the Diocese on

400+ CVA cases, were not aware that on March 1, 2023 (when the CVA Lawsuit settled), that the

Diocese had retained bankruptcy counsel, made the decision to file bankruptcy, had their

bankruptcy counsel prepare all of the necessary paperwork, and would actually be filing

bankruptcy imminently. See Costello Affirmation at ¶ 9; see also McDermott Affirmation at ¶ 18.

Surely, when the terms of the “Settlement Agreement and Full and Final Release of Claims” (the

“Agreement”) referrable to the CVA Lawsuit were agreed upon, and executed copies of the same

were delivered to Defendants on March 8, 2024, they were aware of the Diocese’s impending

bankruptcy, yet on March 9, 2024 – a mere six (6) days before the bankruptcy filing – Defendants

still confirmed that payment would be issued by March 29, 2024. See Exhibit 3; see also Exhibit

10 at ¶ 15. It similarly defies all logic that Defendants – who have also been counsel to the Diocese

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for several decades – were unaware that the bankruptcy filing was in progress when the CVA

Lawsuit settled. See Costello Affirmation at ¶ 5.

Accordingly, at a minimum, Defendants’ motion must be denied as premature so that

Plaintiff is able to take discovery to conclusively determine who knew what and when. This is

because if it is shown – as Plaintiff anticipates that it will be – that at the time of the settlement

conferences, Defendants were aware that the Diocese had already begun the process of filing

bankruptcy, but nonetheless agreed to settle the CVA Lawsuit and cause Plaintiff forgo his right

to a jury trial, they committed a fraud.

Plaintiff also submits this Memorandum of Law in Support of his Cross-Motion for Leave

to Amend the Complaint. While Plaintiff does not believe that it is necessary to amend the

Complaint given that the facts contained therein are more than enough to satisfy New York’s notice

pleading standard, to the extent that this Court deems it necessary, Plaintiff cross-moves for leave

to amend the Complaint to include the additional facts set forth herein and in his accompanying

affidavit which unequivocally establish his detrimental reliance on the material misrepresentations

and omissions of fact made by Defendants that caused him to settle the CVA Lawsuit and forgo

his right to a jury trial.

Leave to amend should be freely granted, especially in instances like this one where

Defendants will not be prejudiced as the amendments that Plaintiff seeks to make arise from the

same set of facts as those set forth in the Complaint which Defendants have had notice of from the

time that they were served with the same several months ago. Moreover, discovery in this matter

has not even begun, so Defendants will have the opportunity to fully explore the claims that

Plaintiff has made and the damages that he seeks.

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STATEMENT OF RELEVANT FACTS

Plaintiff incorporates, by reference, the statements of relevant facts set forth in the

accompanying Affirmations of Jordan K. Merson and Jesse R. Mautner, both dated June 4, 2024.

MOTION TO DISMISS STANDARD

In determining whether to grant a motion to dismiss for failure to state a cause of action, a

pleading is to be afforded a liberal construction, and the court should accept as true the facts alleged

in the complaint, accord the plaintiff the benefit of every possible inference, and only determine

whether the facts, as alleged, fit within any discernible legal theory. See TIAA Global Investments,

LLC v. One Astoria Square LLC, 127 A.D.3d 75 (1st Dept. 2015); see also Behar v. Glickenhaus

Westchester Development, Inc., 122 A.D.3d 784 (2d Dept. 2014).

Additionally, on a motion to dismiss, a court’s analysis of a plaintiff’s claims is limited to

the four corners of the pleading, the allegations of which are given liberal construction and

accepted as true. See Johnson v. Proskauer Rose LLP, 129 A.D.3d 59 (1st Dept. 2015). As such,

when considering a motion to dismiss a complaint, the sole criterion is whether the pleading states

a cause of action, and if, when taken together, the factual allegations manifest any cause of action

cognizable at law, the motion for dismissal must fail. See Pacific Carlton Development Corp. v.

752 Pacific, LLC, 62 A.D.3d 677 (2d Dept. 2009).

Accordingly, on a motion to dismiss, a court should not resolve the merits of a claim by

making factual determinations. See T. Lemme Mechanical, Inc., v. Schalmont Cent. School Dist.,

52 A.D.3d 1006 (3d Dept. 2008). In ruling on a motion to dismiss, it is not the function of a court

to evaluate the merits of a case or determine whether a plaintiff can ultimately establish their

allegations. See Carbillano v. Ross, 108 A.D.2d 776 (2d Dept. 1985). Rather, on a motion to

dismiss, it is the court’s duty to determine whether, upon any rational construction of the evidence,

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a trier of facts could find for the plaintiff, not to weigh proof. See Choi v. Mann, 104 A.D.2d 354

(2d Dept. 1984). On a motion to dismiss for failure to state a cause of action, any fact that can be

fairly implied from the pleadings will be deemed alleged. See L. Magarian & Co., Inc., v.

Timberland Co., 245 A.D.2d 69 (1st Dept. 1997).

A pleading attacked for insufficiency must be accorded a liberal construction, and if it

states, in some recognizable form, any cause of action known to law, it cannot be dismissed. See

Schlackman v. Robin S. Weingast & Associates, Inc., 18 A.D.3d 729 (2d Dept. 2005). If any

portion of any cause of action is sufficient, it should not be dismissed on a motion. See Lacks v.

Lacks, 12 N.Y.2d 268 (1963); see also Napoli v. St. Peter’s Hospital of Brooklyn, 213 N.Y.S.2d 6

(1961). When a cause of action may be discerned, no matter how poorly stated, the complaint

should not be dismissed for failure to state cause of action. See L. Magarian & Co., Inc., 245

A.D.2d at 69.

Indeed, to survive a motion to dismiss for failure to state a cause of action, a pleading need

only state allegations from which damages attributable to the named defendants’ conduct may

reasonably be inferred. See Fielding v. Kupferman, 65 A.D.3d 437 (1st Dept. 2009). A motion to

dismiss for failure to state a cause of action is available only where a dispute pertains to the law,

not the facts. See Abrams v. Richmond County S.P.C., 125 Misc.2d 530 (1984).

The criterion in considering a motion to dismiss for failure to state a claim is whether the

proponent of the pleading has a cause of action, not whether he has stated one. See Allen v. City

of New York, 49 A.D.3d 1126 (3d Dept. 2008). If it is possible upon the facts alleged for a plaintiff

to recover, the complaint or cause of action must be sustained on a motion to dismiss for failure to

plead a cause of action. See Roland Pietropaoli Trucking, Inc. v Nationwide Mut. Ins. Co., 100

A.D.2d 680 (3d Dept. 1984). A complaint will prevail against a motion to dismiss if any cause of

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action can be derived from its allegations by implication or through liberal construction. See

Robert H. Law, Inc. v. Samuel Kosoff & Sons, Inc., 46 A.D.2d 724 (4th Dept. 1974).

Applying these standards to the present motion before this Court, the arguments raised by

Defendants’ motion should not be decided at this point without the benefit of discovery, and

Defendants’ motion to dismiss should be denied in its entirety.

LEGAL ARGUMENT

Plaintiff is able demonstrate that: (1) he has stated colorable causes of action against

Defendants; (2) he has made a sufficient showing that Defendants’ motion is premature as

proceeding with discovery will lead to the uncovering of additional relevant evidence and facts

essential to opposing the motion to dismiss that are exclusively within the knowledge or control

of Defendants; and, (3) if necessary, he should be granted leave to amend the Complaint.

POINT I: PLAINTIFF’S COMPLAINT STATES COLORABLE CAUSES OF
ACTION AGAINST DEFENDANTS

1. Plaintiff’s Complaint Properly States Causes of Action for Fraud and Fraudulent
Inducement as to Defendants

It is black letter law that, “[t]he required elements of a common-law fraud claim are ‘a

misrepresentation or a material omission of fact which was false and known to be false by [the]

defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance on

the other party on the misrepresentation or material omission, and injury.’” See Ambac Assur.

Corp. v. Countrywide Home Loans, Inc., 31 N.Y.3d 569, 578-579 (2018) (internal citation

omitted).

While the quoted language in Defendants’ Memorandum of Law (at p. 3) referable to the

standard for stating a cognizable claim for fraudulent inducement is not found anywhere in the two

cases cited to in support thereof, Plaintiff nonetheless acknowledges that, “under New York law,

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claims for . . . fraudulent inducement require a plaintiff to prove: (1) a material misrepresentation

or omission of fact, (2) made by the defendant with knowledge of its falsity (3) and an intent to

defraud; (4) reasonable reliance on the part of the plaintiff; and (5) resulting damages to the

plaintiff.” See Tradeshift, Inc. v. Smucker Servs. Co., 2021 U.S. Dist. LEXIS 187111, *12-13

(S.D.N.Y. 2021) (internal citations omitted).

Plaintiff has properly pleaded causes of action for both fraud and fraudulent inducement as

he has alleged in the Complaint (at ¶¶ 23, 32, 41 and 51) and proposed Amended Complaint (at ¶¶

23, 32, 41 and 51) that Defendants, “acted with an intent to deceive and/or defraud when [they]

materially misrepresented and/or omitted facts to Plaintiff including . . . the financial condition of

[their] client, the Diocese, and how if the CVA Lawsuit did not settle, the Diocese would have to

file bankruptcy . . . in order to induce Plaintiff to settle the CVA Lawsuit . . . and forgo his right to

a jury trial.”

Plaintiff also alleges in the Complaint (at ¶¶ 24, 33, 42 and 52) and proposed Amended

Complaint (at ¶¶ 24, 33, 42 and 52) that Defendants, “were aware of the falsity of the materially

misrepresented facts at the time that [they] presented them to Plaintiff as . . . [Defendants] were

aware that the Diocese’s bankruptcy filing was in progress and imminent at the time that [they]

agreed to settle the CVA Lawsuit.” Specifically, Plaintiff was explicitly told that if he did not

settle the CVA Lawsuit, the Diocese would file bankruptcy to avoid a jury trial. He was also

explicitly told that if he did settle the CVA Lawsuit, that he would be compensated and finally get

the closure that he needed to move forward with his life. Plaintiff thereafter settled the CVA

Lawsuit based upon Defendants’ representations. However, despite Defendants’ representations,

Plaintiff was never compensated. These critical facts were not acknowledged by Defendants’

motion and are, at best, a huge issue of fact improper for summary judgment, let alone a motion to

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dismiss. Simply put, Defendants’ representations that Plaintiff would be compensated if he settled

omitted that the Diocese’s bankruptcy filing would preclude his being compensated. Defendants

had knowledge of the falsity of their representations as they were not only counsel to the Diocese

in 400+ cases CVA cases but have also represented the Diocese for decades. Plaintiff reasonably

relied on Defendants’ intentional misrepresentations which ultimately caused him pain and

suffering as they prevented him from being able to have closure, and instead resulted in him being

defrauded by the lawyers of the organization that caused him to be sexually abused by a priest

when he was a child. Plaintiff was completely revictimized and retraumatized by Defendants.

Two examples make the point. First, at the end of the initial settlement conference on

Thursday, February 24, 2023, Defendant Costello stated that the Diocese’s “best and final”

counteroffer of $250,000 would remain on the table until Tuesday, February 28, 2023 at 12:00

p.m., and that if it was not accepted, the Diocese would, “take the next steps as deemed

appropriate.” See Merson Affirmation at ¶ 8; see also Mautner Affirmation at ¶ 8. Given

Defendants’ previous threats that if the CVA Lawsuit did not settle, the Diocese would be forced

to file bankruptcy, it was obvious was those “next steps” were.

Additionally, during a third settlement conference on Tuesday, February 28, 2023,

Defendant Costello went out of his way to reference a recent news article concerning the Diocese

of Buffalo’s ongoing bankruptcy, and how the survivors there had been waiting five (5) years for

payment. See Merson Affirmation at ¶ 9; see also Mautner Affirmation at ¶ 9. It is axiomatic that

this reference by Defendant Costello was also meant to influence Plaintiff to settle the CVA

Lawsuit, or he would end up like the survivors in Buffalo. As more fully set forth in Plaintiff’s

Affidavit (at ¶ 7), these were the representations that ultimately caused him to agree to settle the

CVA Lawsuit and forgo his right to a jury trial.

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Plaintiff further alleges in the Complaint (at ¶¶ 25, 34, 44 and 54), proposed Amended

Complaint (at ¶¶ 25, 34, 44 and 54), and affidavit (at ¶ 7) that he, “reasonably and justifiably relied

on the material misrepresentations and/or omissions of fact provided to him by [Defendants] to his

own detriment, as he would not have agreed to settle the CVA Lawsuit and forgo his right to a jury

trial had [Defendants] not represented to him that if he did not, the Diocese would have to file for

bankruptcy.”

Plaintiff finally alleges in the Complaint (at ¶¶ 26-27, 35-36, 45-46 and 55-56), proposed

Amended Complaint (at ¶¶ 26-27, 35-36, 45-46 and 55-56), and affidavit (at ¶ 8) that as a result

of Defendants’ conduct, “[he] has sustained in the past, and will continue to sustain in the future,

serious and severe psychological injuries . . . as [Defendants’] conduct forced him to reopen a

chapter of his life that he thought had finally closed, and forced him to have to relive the sexual

abuse that he endured at the hands one of the Diocese’s priests when he was a child”, as well as

forced him to, “continue to expend sums of money . . . in order to ensure that he gets the justice

and compensation that he rightfully deserves.”

Additionally, while Defendants argue (at p. 4) that, “the mere suggestion that Defendants

made any misrepresentation to Plaintiff is simply absurd, particularly since the Plaintiff was

represented by [counsel] during the course of the underlying action” such that there was no privity

between him and Defendants, they do not cite to a single case in support thereof.

Rather, even if Plaintiff were required to establish privity with Defendants – which he

contends that he does not and Defendants fail to otherwise establish – the Court of Appeals held

in Prudential Ins. Co. v. Dewey Ballantine, Bushby, Palmer & Wood, 80 N.Y. 2d 377, 384 (1992)

that liability can be imposed on parties not in privity when there is: “(1) an awareness by the maker

of the statement that it is to be used for a particular purpose; (2) reliance by a known party on the

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statement in furtherance of that purpose; and (3) some conduct by the maker of the statement

linking it to the relying party and evincing its understanding of that reliance.” (internal citations

omitted).

There can be no dispute that Defendants were not only aware that their statements

concerning the financial status of the Diocese were to be used for a particular purpose (i.e., settling

the CVA Lawsuit), but also that Plaintiff would be made aware of and rely on such statements for

the purpose of agreeing to settle the CVA Lawsuit. See Prudential Ins. Co., 80 N.Y. 2d at 384-

385.

Finally, and crucially for the purposes of the instant motion, Defendants’ reference (at p.

4) to the fact that Plaintiff was represented by counsel is nothing more than a red herring as the

law is clear that, “the question of what constitutes reasonable reliance is not generally a question

to be resolved as a matter of law on a motion to dismiss.” See Avnet, Inc. v. Deloitte Consulting

LLP, 187 A.D.3d 430, 432 (1st Dept. 2020) (Finding that a plaintiff’s reliance on a

misrepresentation may be justified even where they are represented by counsel) (internal citation

omitted); see also Gonzalez v. 40 W. Burnside Ave. LLC, 107 A.D.3d 542, 544 (1st Dept. 2013)

(“Whether the plaintiff could justifiably rely on the false representation is an issue of fact”)

(internal citation omitted).

As such, it is respectfully submitted that Plaintiff has properly pleaded causes of action for

fraud and fraudulent inducement as to Defendants, and that their motion to dismiss such causes of

action should be denied.

2. Plaintiff’s Complaint Properly States a Cause of Action for Aiding and Abetting Fraud as
to Defendants

As for a cause of action for aiding and abetting fraud, a plaintiff must plead, “the existence

of an underlying fraud, knowledge of the fraud by the aider and the abettor, and substantial

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assistance by the aider and abettor in the achievement of the fraud.” See Markowitz v. Friedman,

144 A.D.3d 993, 996 (2d Dept. 2016) (internal citations omitted).

As it pertains to both the existence of an underlying fraud, as well as the knowledge of the

fraud by Defendants as the aiders and abettors, Plaintiff incorporates, by reference, the arguments

set forth above on pages 6-10.

Finally, Plaintiff has properly pleaded that Defendants provided “substantial assistance . .

. in the achievement of the fraud” as they went beyond “mere inaction” in affirmatively

representing to him that if he did not settle the CVA Lawsuit, the Diocese would have to file

bankruptcy, whereas if he did settle, he would be compensated and get closure. See Markowitz,

144 A.D.3d at 996 (internal citations omitted).

As such, it is respectfully submitted that Plaintiff has properly pleaded a cause of action

for aiding and abetting as to Defendants, and that their motion to dismiss such a cause of action

should be denied.

3. Plaintiff’s Complaint Properly States a Cause of Action for Breach of Contract as to
Defendants

To plead a cause of action for breach of contract, a plaintiff must allege that, “(1) a contract

exists; (2) plaintiff performed in accordance with the contract; (3) defendant breached its

contractual obligations; and (4) defendant’s breach resulted in damages. See 34-06 73, LLC v.

Seneca Ins. Co., 39 N.Y.3d 44, 52 (2022) (internal citations omitted).

In arguing (at p. 5) that the Agreement is not an existing contract based upon a ruling by

the Bankruptcy Court for the Northern District of New York (the “Bankruptcy Court”), Defendants

completely misapprehend the law. Rather, what the Bankruptcy Court actually held was simply

that the Agreement was not an executory contract because while in order for a contract to be

executory, the obligations of both parties to the contract must be, “so far unperformed that the

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failure of either to complete performance would constitute a material breach excusing performance

of the other”, the only underperformance here was on the part of Defendants and their failure to

issue payment. See COR Route 5 Co., LLC v. Penn Traffic Co. (In re Penn Traffic Co.), 524 F.3d

373, 379 (2d Cir. 2008) (internal citations omitted).

The Bankruptcy Court did not rule that the Agreement was not an existing contract, only

that it was not executory because whereas Plaintiff, “performed in accordance with the contract”,

Defendants, “breached [their] contractual obligations”. See 34-06 73, LLC, 39 N.Y.3d at 52

(internal citations omitted); see also Plaintiff’s Complaint at ¶¶ 9-12, 80-83 and 91-94; Plaintiff’s

Amended Complaint at ¶¶ 9-12, 80-83 and 91-94.

Plaintiff has also properly pleaded the fourth and final aspect for a cause of action sounding

in breach of contract as he has alleged in the Complaint (at ¶¶ 84-85 and 95-96), proposed

Amended Complaint (at ¶¶ 84-85 and 95-96), and affidavit (at ¶ 8) that as a result of Defendants’

conduct, “[he] has sustained in the past, and will continue to sustain in the future, serious and

severe psychological injuries . . . as [Defendants’] conduct forced him to reopen a chapter of his

life that he thought had finally closed, and forced him to have to relive the sexual abuse that he

endured at the hands one of the Diocese’s priests when he was a child”, as well as forced him to,

“continue to expend sums of money . . . in order to ensure that he gets the justice and compensation

that he rightfully deserves.”

Despite Defendants clearly admitting (at pp. 4-5) that the issues of fact in this case are

different than those ruled on by the Bankruptcy Court, they again waste this Court’s and the

parties’ valuable time and resources by making this argument anyway.

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As such, it is respectfully submitted that Plaintiff has properly pleaded a cause of action

Case Info

Judge

Daniel C. Lynch Track Judge’s New Case

Case No.

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Document Filed Date

June 04, 2024

Case Filing Date

January 29, 2021

County

Parties

COSTELLO, MICHAEL L. Attorney for the Defendant
CRONMILLER, THOMAS B Attorney for the Defendant
HASAPIDIS, ANNETTE G. Attorney for the Plaintiff
John Doe Plaintiff
MAUTNER, JESSE R Attorney for the Plaintiff
McDERMOTT, SAMANTHA MARIE Attorney for the Defendant
Merson, Jordan Attorney for the Plaintiff
Michael L. Costello , ESQ. Defendant
SCIORTINO, TARA JEAN Attorney for the Defendant
Tobin and Dempf, LLP Defendant

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Motion-Secondary: John Doe v. Tobin And Dempf, Llp, Michael L. Costello , Esq.

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