Preview
INDEX NO. 653476/2013
(FILED: NEW YORK COUNTY CLERK 0171772014)
NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 01/17/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
X --
PETER STERN and EXPRESS TRADE CAPITAL, INC.
Plaintiffs,
Index No. 653476-2013
Against MEMORANDUM OF LAW
IN OPPOSITION TO
MOTION TO DISMISS
OLEG ARDACHEYV, AIR CARGO SERVICES LLC,
DELEX, INC., DELEX AIR CARGO, LLC, a Delaware limited
liability company, and DELEX AIR CARGO, LLC, a
Washington limited liability company.
Jointly and Severally
Defendants,
aa. X
PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’
MOTION TO DISMISS THE COMPLAINT
INTRODUCTION
Plaintiffs herein, by and through their attorney David Estrakh, Esq., submit this
Memorandum of Law in opposition to defendants’ motion to dismiss the plaintiffs’
complaint. Defendants’ motion must be denied because:
(A) The plaintiffs’ complaint presents essential questions that must be determined
by a trier of fact, namely whether a contract existed between the parties; whether the
contract was created by express written agreement (with or without parole evidence), or
one implied in fact or law; and whether such contract was breached by defendants;
(B) Defendants’ claim that plaintiffs’ allegations fail to state a cause of action
must be determined in favor of plaintiffs the facts as presented in the complaint must be
assumed to be the correct when determining whether a cause of action may arise from
plaintiffs allegations; the allegations plainly state sufficient grounds for several causes of
action including, inter alia, breach of contract (assumpsit), promissory estoppel, unjust
enrichment, and fraudulent conveyances.
(C) Questions concerning whether the evidence supports the facts as presented by
plaintiffs must be presented for determination by a trier of fact at trial.
1
BACKGROUND
The facts, as presented by plaintiffs are plain and easily encapsulated. Mr. Stern
and Mr. Ardachev were business associates who engaged in a joint venture that was run
through the company Air Cargo Services, LLC (ACS).' The ownership, including all
profits, distributions, and losses was evenly split at 50/50.? At some point, plaintiffs sold
their entire share to the defendants and the parties began to conduct their affairs in accord
with this agreement; plaintiffs began to forego any compensation, profit share,
distribution, or any other form of income from ACS, and simultaneously, defendants
enjoyed the benefits thereby conferred by plaintiffs. According to the agreement,
defendants had about three years to provide payment for sale, and when such time came,
defendants reneged on their obligations and denied the existence of any such agreement.
The rest of the facts concern details of the contract, whether the contract is
binding as it is written (or when taken into account with parole evidence), whether the
conduct of the parties subsequent to executing the agreement created either a contract in
fact or quasi contracts implied in law, whether defendants breached the contract, and
whether the defendants sought to escape their obligations by wasting and diverting assets
from ACS in an effort to avoid their duties under the contract.
POINT ONE
THE EXISTANCE OF A VALID AGREEMENT BETWEEN THE PARTIES IS A
QUESTION OF FACT TO BE DETERMINED AT TRL
The existence and terms of an express or implied in fact contract are generally
issues of fact that are determined at trial. A court may find an implied in fact contract
where the parties consent to an agreement may be inferred from their acts and the
' Complaint, Par.14-16
2 Jd. At 17 and 21
3 Id. See generally
4 Six West Retail Acquisition, Inc. v. Sony Theatre Management Corp., 2004-1 Trade
Cas. (CCH) P 74361, 2004 WL 691680 (S.D.N.Y. 2004), aff'd, 124 Fed. Appx. 73, 2005-
2 Trade Cas. (CCH) P 74931 (2d Cir. 2005), cert. denied, 126 S. Ct. 660 (U.S. 2005)
2
surrounding circumstances.’ When determining such questions on a motion to dismiss,
the plaintiffs’ factual allegations must be accepted as true.°
The actions or conduct of the parties, in addition to the language of their
purported contract, can objectively manifest their intent to be bound.’ A party’s
acceptance, without reservation, of the benefits under an agreement is a strong indication
that a party assented to be bound by the agreement.* In this case, plaintiffs have alleged
that their own conduct, coupled with the conduct of the defendants, provide a strong
presumption for determining the existence of a valid and binding agreement between the
parties. Proof of performance of an agreement, in accordance with its terms, as alleged
in the complaint, can also constitute a showing of mutual assent by conduct.'° Here,
plaintiffs allege proof of performance by describing the relinquishing of their right to
distributions or payments from ACS, where those distributions and payments were
previously split equally between the parties prior to the alleged agreement.!!
In addition, where the parties clearly intended to enter into a binding agreement, a
claim for breach of the agreement will not be dismissed as a matter of law at the pleading
stage simply because the language of the agreement is imprecise because parol evidence
5 Spencer Trask Software and Information Services LLC v. RPost Intern. Ltd., 383 F.
Supp. 2d 428, 49 U.C.C. Rep. Serv. 2d 917 (S.D.N.Y. 2003)(
® Chan v. Chan, 193 A.D.2d 575, 597 N.Y.S.2d 422 (2d Dept. 1993)
7 Maffea v. Ippolito, 247 A.D.2d 366,367, 668 N.Y.S.2d 653, 654 (2nd Dept. 1998);
Restatement Second, Contracts Section 19(1) (The manifestation of assent may be by
written or spoken words or by actions or failures to act.)
* See Pollitz v. Wabash R. Co., 207 N.Y. 113, 129, 100 N.E. 721, 725 (1912) (plaintiff
estopped from denying existence of a contract “when conduct of a plaintiff, relating to
the transaction or matter complained of by him, subsequent to the rise of it, justifies and
supports the normal and reasonable conclusion that he, by his assent thereto or
acquiescence therein, has accepted and adopted it.:); see also Palumbo v. Norstar Bank
Upstate New York, 212 A.D.2d 377, 622 N.Y.S.2d 263 (1st Dep’t 1995) (plaintiffs
ratified a settlement agreement where the agreement was fully performed and the
laintiffs accepted its benefits
Bp Seegenerally, Complaint.
1 iner Technology Inc. v. Hayes, 213 A.D.2d 881, 624 N.Y.S.2d 284 (3d Dep’t 1995);
Dodge Street, LLC v. Livecchi, 32 Fed. Appx. 607 (2d Cir. 2002).
"| See generally, Plaintiffs’ Complaint
may be used to identify the subject matter of the contract, the parties thereto, and to
explain the meaning of the terms of the agreement.”
A dispute as to whether mutual assent to agreement exists is usually determined
by a trier of fact.'> In this case, the parties purportedly signed a contract!’ so the
intention to be bound to some agreement is clear; the only questions that remains are the
precise terms of the agreement, which can be determined by a trier of fact through a
review of documentary and testimonial evidence presented at trial.
In determining whether the parties intended to enter into an agreement, the
reasonable expectations and purpose of the ordinary business person when making an
ordinary business contract serve as the guideposts to determine intent.'* In this case, we
have two parties who have run a joint venture together and made a very simple sale
agreement to articulate what could otherwise be a complicated sale and unwinding of a
business, in a very informal manner. Instead of calculating precise values of business
assets, expected profits, and other valuations, the parties simply agreed to a sum as
between them and set the dates for payment. The fact that the agreement is not formal
enough does not alone bar the validity or enforceability of the alleged agreement.'°
° Korff v. Corbett, 18 A.D.3d 248, 794 N.Y.S.2d 374 (1st Dep’t 2005)
8 Bazak Int’l Corp. v. Tarant Apparel Group, 378 F. Supp. 377, 389 (S.D.N.Y. 2005)
'’ Note that defendants’ never allege that the agreement was not signed by the
defendants; they only claim that the agreement is so incomplete as to be non-binding.
See Attorney’s Affirmation in Support of Motion to Dismiss.
'S Album Realty Corp. v. American Home Assur. Co., 80 N.Y.2d 1008, 1010, 592
N.Y.S.2d 657, 658, 607 N.E.2d 804 (1992)
'© The fact that the parties intended to negotiate a more formal agreement does not negate
any legal effect their preliminary agreement may have. U.S. Fidelity and Gaur. Co. v.
Delmar Development Partners, LLC, 14 A.D.3d 836, 788 N.Y.S.2d 252 (3d Dep’t 2005).
4
POINT TWO
AMBIGUOUS, INCOMPLETE, OR UNCERTAIN TERMS IN A CONTRACT DO
NOT PRECLUDE THE VALIDITY OF A BINDING AGREEMENT AS A
MATTER OF LAW.
Generally, courts are reluctant to deny enforcement of agreements on
indefiniteness grounds.' Imperfect expression does not necessarily indicate that the
parties did not intend to form a binding contract,'* and an entire agreement need not be
void merely because one provision is indefinite and even in the absence of a material
term, there may still be a binding contract.’ Thus, the concept of definiteness of an
agreement is not applied rigidly because imperfect expression does not necessarily
indicate that the parties did not intend to formal binding contract.”°
While defendants claim that the written agreement is not sufficiently definite on
its face, it is well settled that a court may look beyond the “four corners” of an agreement
to determine whether the missing term is actually essential.”! No less a justice than
Benjamin Cardozo acknowledged that a court should refuse to enforce a contract on
grounds of indefiniteness only when the indefiniteness is to such a degree that
clarification is futile.” In this case, parole evidence and the testimony of the parties
makes the meaning of any indefinite terms plain — the subject of the sale was a business
between two business partners to effect the transfer plaintiffs’ ownership interest to the
defendants.
If it is found that the parties intended to be bound but failed to state an essential
term clearly or failed to include such a term, a court will attempt to ascertain the intent of
'” Cleveland Wrecking Co. v. Hercules Const. Corp., 23 F. Supp. 2d 287, 293 (E.D.N.Y.
1998), aff'd, 198 F.3d 233 (2d Cir. 1999)
'8 166 Mamaronocek Ave. Corp. v. 151 East Post Road Corp., 78 N.Y.S.2d 88, 91, 571
N.YS.2d 686, 688, 575 N.E.2d 104 (1991); accord, Korff v. Corbett, 18 A.D.3d 248, 250,
794 N.Y.S.2d 374, 376 (1 Dep’t 2005).
'° Dimario v. Coppola, 10 F. Supp. 2d 213, 219 (E.D.N.Y. 1998)
2° 166 Mamaronocek Ave. Corp. v. 151 East Post Road Corp., 78 N.Y.S.2d 88, 91, 571
N.YS.2d 686, 687, 575 N.E.2d 104 (1991).
>! Shan v. Dunk, 84 F.3d 73, 79 (2d Cir. 1996)
?2 Heyman Cohen & Sons v. M. Lurie Woolen Co., 232 N.Y. 112, 114, 133 N.E. 370,
371 (1921) (Cardozo, J.)
the parties and enforce the contract. Before a court may find an agreement
unenforceable for lack of definiteness, it must be satisfied that the agreement cannot be
rendered reasonably certain by reference to an extrinsic standard that makes its meaning
clear." In this case, the parties intended to be bound to something regarding that payment
since they both signed and acknowledge the agreement and even had a witness present to
sign as well.
Many of the terms agreed to are clearly indicated on face contract: the parties are
Peter Stern and Oleg Ardachev; the witness is Arthur Hish; the price of what is being sold
is indicated unequivocally as is the time by which the amount is owed. The essential
terms of price, parties, and time are expressed clearly within the four corners of the
contract.”> The subject matter can be implied by the relationship of the parties to each
other, including the witness and also by other parole evidence that plaintiffs intend to
present at trial.
The existence of a binding contract is not dependent upon the parties’ subjective
intent but upon the objective manifestation of their mutual intent as gathered by their
expressed words and deeds. *° Where it is clear from the language of an agreement that
parties intended to be bound but their agreement is not complete because of absent or
ambiguous terms, the parties may be held to their bargain if there is an objective method
27
for supplying the terms in question.
What is in the minds of parties to a contract is evidenced and determined by their
words or deeds.”* In the instant case, the only unclear terms are what is being sold and
which of the two parties is selling it, since both parties signed the agreement and the third
3 See generally Restatement Second, Contracts Section 204) (“Supplying an Omitted
Essential Term”); Williston on Contract Section 4:22 (4th Ed.) (stating that when “the
parties’ language and conduct evidences an intent to contract, and there is some
reasonable means for giving an appropriate remedy, the court will strain to implement
their intent.”).
24 Mar Oil, S.A. v. Morrissey, 982 F.2d 830, 840 (2d. Cir. 1993)
25 See Exhibit A
26 Brown Bros. Elec. Contractors, Inc. v. Beam Const. Corp., 41 N.Y.2d 397, 393
N.Y.S.2d 350, 352, 361 N.E.2d 999 (1977).
27 166 Mamaronocek Ave. Corp. v. 151 East Post Road Corp., 78 N.Y.S.2d 88, 91, 571
N.YS.2d 686, 688, 575 N.E.2d 104 (1991).
°8 Porter v. Commercial Casualty Ins. Co., 292 N.Y. 176, 183, 54 N.E.2d 353, 356 (1944)
6
signature is simply a witness. The terms are not supplied because they are so obvious as
between the parties and these terms also become apparent to any reasonable observer
examining the actions of the parties immediately following the signing of the contract.
New York case law acknowledges that if intent must be determined from disputed
evidence, a question of fact is presented.” Upon executing the agreement, the plaintiffs
allege that they relinquished ownership and control of a business that was previously
30
mutually owned and controlled by both parties. The defendants became the sole
beneficiaries of the business whereas the business was previously split evenly between
plaintiffs and defendants.*! Bank statements, accountants, and the parties to the contract
will attest to the fact that the business of ACS transferred ownership following the
contract. While defendants deny these facts,” the very dispute of such facts that show
the intent of the parties to obligate themselves to a contract indicates a clear question of
fact that cannot be decided on the law.
POINT THREE
THE FACTS AS PRESENTED IN THE COMPLAINT PLAINLY STATE
SEVERAL CAUSES OF ACTION.
In ruling on a motion to dismiss, the court decides whether the plaintiff can
succeed on any reasonable view of facts as stated and inferred.* If from the four corners
of the complaint factual allegations are discerned which, taken together, manifest any
cause of action cognizable at law, a motion to dismiss will fail.** In this case, even
defendants’ own affirmation in support of the motion to dismiss acknowledges that the
allegations in the complaint “assert claims sounding in what appears to be breach of
contract, unjust enrichment, and wrongful transfer of assets.” a
» Kenyon v. Delman, 38 F. Supp. 2d 107, 110 (N.D.N.Y. 1998), judgment aff'd, 198 F.
3d 233 (2d Cir. 1999)
5° Complaint, Par. 17, 21, and 39
3114. at Par. 21, 39, 45, and 46
* See generally, Defendants’ Answer
33 Campaign for Fiscal Equity, Inc. v. State, 86 N.Y.2d 307, 631 N.Y.S.2d 565 (1995)
34511 West 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 152, 773 N.E.2d
496, 746 N.Y.S.2d 131 (2002).
° Attorney’s Affirmation in Support of Motion to Dismiss, Par. 6
7
The court's function is to "accept ... each and every allegation forwarded by the
plaintiff without expressing any opinion as to the plaintiff's ability ultimately to establish
the truth of these averments before the trier of the facts." Thus, the pleading is to be
liberally construed and the pleader afforded the benefit of every possible favorable
inference.
In the present case, the elements of a contract and breach of contract are plainly
stated. The contract is for the sale of plaintiffs’ share of ACS in exchange for
compensation from the defendants.*” The agreement was embodied in a writing, which
can be clarified and corroborated by parole evidence and testimony, and the agreement
can also be adduced from the conduct of the parties in performing on the agreement. The
breach is simply defendants’ refusal to pay for plaintiffs’ share of the company at the
appointed time, even though plaintiffs followed through on their obligations to relinquish
their control and share in the company.*®
The complaint also alleges facts that, if true, are sufficient to find the existence of
implied or quasi contracts. A contract may be implied in fact where inferences may be
drawn from the facts and circumstances of the case and the intention of the parties as
indicated by their conduct.*? Contracts implied in fact result from the conduct of the
parties and its existence may be established through proof of conduct of the parties
recognizing and acting on the contract."° In the present case, the defendants took sole
control of the company, including the taking of salaries, distributions, and other company
funds into their sole control, whereas prior to the agreement such funds were split
between the plaintiffs and defendants.
36919 Broadway Corp. v Alexander's, Inc., 46 NY2d 506, 509, 387 N.E.2d 1205, 414
N.Y.S.2d 889 [1979]).
3
7 See generally, Plaintiffs’ Complaint
38 Iq.
3° Pache v. Aviation Volunteer Fire Co., 20 A.D.3d 731, 800 N.Y.S.2d 228 (3d Dep’t
2005)
40 Apex Oil Co. v. Vangaurd Oil & Service Co. Inc., 760 F.2d 417, 422, 1 Fed. R. Serv.
3d 874, 40 U.C.C. Rep. Serv. 1221 (2d Cir. 1985); accord Bongat v. Fairview Nursing
Care Center, Inc. v. Callaghan, 22 I-E.R. Cas. (BNA) 113, 2004 WL 758303 (S.D.N.Y.
2004); Lumhoo v. Home Depot USA, Inc., 299 F. Supp. 2d 121, 161 (E.D.N.Y. 2002)
8
In determining whether the parties entered into an agreement, a court should
generally apply state-law principles governing the issue of contract formation."' Although
plaintiffs have submitted into evidence a copy of the contract, dated and executed by the
parties to this action, where the parties behave as though they have entered into a
contract, a contract will come into existence whether or not the precise moment of
agreement may be determined.”
Plaintiffs intend to show the conduct of the parties was in accord with the sale
contract through testimony from the company’s accountants, bank statements, and other
financial records as may be gleaned from discovery. While defendants may deny these
allegations, the questions are clearly ones for a trier of fact because if the facts are as
plaintiffs purport them to be, there is a strong case for finding either an express contract
or one implied in fact and in law, and breach of the contract (i.e. defendants’ refusal to
pay which is stated numerous times in the plaintiffs’ complaint).
CONCLUSION
For all the foregoing reasons, as well as those submitted in the Attorney’s
Affirmation in Opposition to the Motion to Dismiss,, defendants’ motion to dismiss this
proceeding should be denied because there are questions of fact that whose answers can
justify or invalidate causes of action and the case should proceed to trial where a trier of
fact can determine the case on the merits.
Dated: New York, New York
January 16, 2014
A y for Plaintiffs
~~
By:
David Estrakh, Esq.
1410 Broadway, Suite 2600
New York, N.Y. 10018
Mobile: (516) 765-5565
‘| Specht v. Netscape Communications Corp., 306 F.3d 17, 27, 48 U.C.C. Rep. Serv. 2d
761 (2d Cir. 2002)
* PCS Sales (USA), Inc. v. Nitrochem Distribution Ltd., 54 UCC Rep Serv2d 35
(S.D.N.Y. 1995)
Preview
INDEX NO. 653476/2013 (FILED: NEW YORK COUNTY CLERK 0171772014) NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 01/17/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK X -- PETER STERN and EXPRESS TRADE CAPITAL, INC. Plaintiffs, Index No. 653476-2013 Against MEMORANDUM OF LAW IN OPPOSITION TO MOTION TO DISMISS OLEG ARDACHEYV, AIR CARGO SERVICES LLC, DELEX, INC., DELEX AIR CARGO, LLC, a Delaware limited liability company, and DELEX AIR CARGO, LLC, a Washington limited liability company. Jointly and Severally Defendants, aa. X PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS THE COMPLAINT INTRODUCTION Plaintiffs herein, by and through their attorney David Estrakh, Esq., submit this Memorandum of Law in opposition to defendants’ motion to dismiss the plaintiffs’ complaint. Defendants’ motion must be denied because: (A) The plaintiffs’ complaint presents essential questions that must be determined by a trier of fact, namely whether a contract existed between the parties; whether the contract was created by express written agreement (with or without parole evidence), or one implied in fact or law; and whether such contract was breached by defendants; (B) Defendants’ claim that plaintiffs’ allegations fail to state a cause of action must be determined in favor of plaintiffs the facts as presented in the complaint must be assumed to be the correct when determining whether a cause of action may arise from plaintiffs allegations; the allegations plainly state sufficient grounds for several causes of action including, inter alia, breach of contract (assumpsit), promissory estoppel, unjust enrichment, and fraudulent conveyances. (C) Questions concerning whether the evidence supports the facts as presented by plaintiffs must be presented for determination by a trier of fact at trial. 1 BACKGROUND The facts, as presented by plaintiffs are plain and easily encapsulated. Mr. Stern and Mr. Ardachev were business associates who engaged in a joint venture that was run through the company Air Cargo Services, LLC (ACS).' The ownership, including all profits, distributions, and losses was evenly split at 50/50.? At some point, plaintiffs sold their entire share to the defendants and the parties began to conduct their affairs in accord with this agreement; plaintiffs began to forego any compensation, profit share, distribution, or any other form of income from ACS, and simultaneously, defendants enjoyed the benefits thereby conferred by plaintiffs. According to the agreement, defendants had about three years to provide payment for sale, and when such time came, defendants reneged on their obligations and denied the existence of any such agreement. The rest of the facts concern details of the contract, whether the contract is binding as it is written (or when taken into account with parole evidence), whether the conduct of the parties subsequent to executing the agreement created either a contract in fact or quasi contracts implied in law, whether defendants breached the contract, and whether the defendants sought to escape their obligations by wasting and diverting assets from ACS in an effort to avoid their duties under the contract. POINT ONE THE EXISTANCE OF A VALID AGREEMENT BETWEEN THE PARTIES IS A QUESTION OF FACT TO BE DETERMINED AT TRL The existence and terms of an express or implied in fact contract are generally issues of fact that are determined at trial. A court may find an implied in fact contract where the parties consent to an agreement may be inferred from their acts and the ' Complaint, Par.14-16 2 Jd. At 17 and 21 3 Id. See generally 4 Six West Retail Acquisition, Inc. v. Sony Theatre Management Corp., 2004-1 Trade Cas. (CCH) P 74361, 2004 WL 691680 (S.D.N.Y. 2004), aff'd, 124 Fed. Appx. 73, 2005- 2 Trade Cas. (CCH) P 74931 (2d Cir. 2005), cert. denied, 126 S. Ct. 660 (U.S. 2005) 2 surrounding circumstances.’ When determining such questions on a motion to dismiss, the plaintiffs’ factual allegations must be accepted as true.° The actions or conduct of the parties, in addition to the language of their purported contract, can objectively manifest their intent to be bound.’ A party’s acceptance, without reservation, of the benefits under an agreement is a strong indication that a party assented to be bound by the agreement.* In this case, plaintiffs have alleged that their own conduct, coupled with the conduct of the defendants, provide a strong presumption for determining the existence of a valid and binding agreement between the parties. Proof of performance of an agreement, in accordance with its terms, as alleged in the complaint, can also constitute a showing of mutual assent by conduct.'° Here, plaintiffs allege proof of performance by describing the relinquishing of their right to distributions or payments from ACS, where those distributions and payments were previously split equally between the parties prior to the alleged agreement.!! In addition, where the parties clearly intended to enter into a binding agreement, a claim for breach of the agreement will not be dismissed as a matter of law at the pleading stage simply because the language of the agreement is imprecise because parol evidence 5 Spencer Trask Software and Information Services LLC v. RPost Intern. Ltd., 383 F. Supp. 2d 428, 49 U.C.C. Rep. Serv. 2d 917 (S.D.N.Y. 2003)( ® Chan v. Chan, 193 A.D.2d 575, 597 N.Y.S.2d 422 (2d Dept. 1993) 7 Maffea v. Ippolito, 247 A.D.2d 366,367, 668 N.Y.S.2d 653, 654 (2nd Dept. 1998); Restatement Second, Contracts Section 19(1) (The manifestation of assent may be by written or spoken words or by actions or failures to act.) * See Pollitz v. Wabash R. Co., 207 N.Y. 113, 129, 100 N.E. 721, 725 (1912) (plaintiff estopped from denying existence of a contract “when conduct of a plaintiff, relating to the transaction or matter complained of by him, subsequent to the rise of it, justifies and supports the normal and reasonable conclusion that he, by his assent thereto or acquiescence therein, has accepted and adopted it.:); see also Palumbo v. Norstar Bank Upstate New York, 212 A.D.2d 377, 622 N.Y.S.2d 263 (1st Dep’t 1995) (plaintiffs ratified a settlement agreement where the agreement was fully performed and the laintiffs accepted its benefits Bp Seegenerally, Complaint. 1 iner Technology Inc. v. Hayes, 213 A.D.2d 881, 624 N.Y.S.2d 284 (3d Dep’t 1995); Dodge Street, LLC v. Livecchi, 32 Fed. Appx. 607 (2d Cir. 2002). "| See generally, Plaintiffs’ Complaint may be used to identify the subject matter of the contract, the parties thereto, and to explain the meaning of the terms of the agreement.” A dispute as to whether mutual assent to agreement exists is usually determined by a trier of fact.'> In this case, the parties purportedly signed a contract!’ so the intention to be bound to some agreement is clear; the only questions that remains are the precise terms of the agreement, which can be determined by a trier of fact through a review of documentary and testimonial evidence presented at trial. In determining whether the parties intended to enter into an agreement, the reasonable expectations and purpose of the ordinary business person when making an ordinary business contract serve as the guideposts to determine intent.'* In this case, we have two parties who have run a joint venture together and made a very simple sale agreement to articulate what could otherwise be a complicated sale and unwinding of a business, in a very informal manner. Instead of calculating precise values of business assets, expected profits, and other valuations, the parties simply agreed to a sum as between them and set the dates for payment. The fact that the agreement is not formal enough does not alone bar the validity or enforceability of the alleged agreement.'° ° Korff v. Corbett, 18 A.D.3d 248, 794 N.Y.S.2d 374 (1st Dep’t 2005) 8 Bazak Int’l Corp. v. Tarant Apparel Group, 378 F. Supp. 377, 389 (S.D.N.Y. 2005) '’ Note that defendants’ never allege that the agreement was not signed by the defendants; they only claim that the agreement is so incomplete as to be non-binding. See Attorney’s Affirmation in Support of Motion to Dismiss. 'S Album Realty Corp. v. American Home Assur. Co., 80 N.Y.2d 1008, 1010, 592 N.Y.S.2d 657, 658, 607 N.E.2d 804 (1992) '© The fact that the parties intended to negotiate a more formal agreement does not negate any legal effect their preliminary agreement may have. U.S. Fidelity and Gaur. Co. v. Delmar Development Partners, LLC, 14 A.D.3d 836, 788 N.Y.S.2d 252 (3d Dep’t 2005). 4 POINT TWO AMBIGUOUS, INCOMPLETE, OR UNCERTAIN TERMS IN A CONTRACT DO NOT PRECLUDE THE VALIDITY OF A BINDING AGREEMENT AS A MATTER OF LAW. Generally, courts are reluctant to deny enforcement of agreements on indefiniteness grounds.' Imperfect expression does not necessarily indicate that the parties did not intend to form a binding contract,'* and an entire agreement need not be void merely because one provision is indefinite and even in the absence of a material term, there may still be a binding contract.’ Thus, the concept of definiteness of an agreement is not applied rigidly because imperfect expression does not necessarily indicate that the parties did not intend to formal binding contract.”° While defendants claim that the written agreement is not sufficiently definite on its face, it is well settled that a court may look beyond the “four corners” of an agreement to determine whether the missing term is actually essential.”! No less a justice than Benjamin Cardozo acknowledged that a court should refuse to enforce a contract on grounds of indefiniteness only when the indefiniteness is to such a degree that clarification is futile.” In this case, parole evidence and the testimony of the parties makes the meaning of any indefinite terms plain — the subject of the sale was a business between two business partners to effect the transfer plaintiffs’ ownership interest to the defendants. If it is found that the parties intended to be bound but failed to state an essential term clearly or failed to include such a term, a court will attempt to ascertain the intent of '” Cleveland Wrecking Co. v. Hercules Const. Corp., 23 F. Supp. 2d 287, 293 (E.D.N.Y. 1998), aff'd, 198 F.3d 233 (2d Cir. 1999) '8 166 Mamaronocek Ave. Corp. v. 151 East Post Road Corp., 78 N.Y.S.2d 88, 91, 571 N.YS.2d 686, 688, 575 N.E.2d 104 (1991); accord, Korff v. Corbett, 18 A.D.3d 248, 250, 794 N.Y.S.2d 374, 376 (1 Dep’t 2005). '° Dimario v. Coppola, 10 F. Supp. 2d 213, 219 (E.D.N.Y. 1998) 2° 166 Mamaronocek Ave. Corp. v. 151 East Post Road Corp., 78 N.Y.S.2d 88, 91, 571 N.YS.2d 686, 687, 575 N.E.2d 104 (1991). >! Shan v. Dunk, 84 F.3d 73, 79 (2d Cir. 1996) ?2 Heyman Cohen & Sons v. M. Lurie Woolen Co., 232 N.Y. 112, 114, 133 N.E. 370, 371 (1921) (Cardozo, J.) the parties and enforce the contract. Before a court may find an agreement unenforceable for lack of definiteness, it must be satisfied that the agreement cannot be rendered reasonably certain by reference to an extrinsic standard that makes its meaning clear." In this case, the parties intended to be bound to something regarding that payment since they both signed and acknowledge the agreement and even had a witness present to sign as well. Many of the terms agreed to are clearly indicated on face contract: the parties are Peter Stern and Oleg Ardachev; the witness is Arthur Hish; the price of what is being sold is indicated unequivocally as is the time by which the amount is owed. The essential terms of price, parties, and time are expressed clearly within the four corners of the contract.”> The subject matter can be implied by the relationship of the parties to each other, including the witness and also by other parole evidence that plaintiffs intend to present at trial. The existence of a binding contract is not dependent upon the parties’ subjective intent but upon the objective manifestation of their mutual intent as gathered by their expressed words and deeds. *° Where it is clear from the language of an agreement that parties intended to be bound but their agreement is not complete because of absent or ambiguous terms, the parties may be held to their bargain if there is an objective method 27 for supplying the terms in question. What is in the minds of parties to a contract is evidenced and determined by their words or deeds.”* In the instant case, the only unclear terms are what is being sold and which of the two parties is selling it, since both parties signed the agreement and the third 3 See generally Restatement Second, Contracts Section 204) (“Supplying an Omitted Essential Term”); Williston on Contract Section 4:22 (4th Ed.) (stating that when “the parties’ language and conduct evidences an intent to contract, and there is some reasonable means for giving an appropriate remedy, the court will strain to implement their intent.”). 24 Mar Oil, S.A. v. Morrissey, 982 F.2d 830, 840 (2d. Cir. 1993) 25 See Exhibit A 26 Brown Bros. Elec. Contractors, Inc. v. Beam Const. Corp., 41 N.Y.2d 397, 393 N.Y.S.2d 350, 352, 361 N.E.2d 999 (1977). 27 166 Mamaronocek Ave. Corp. v. 151 East Post Road Corp., 78 N.Y.S.2d 88, 91, 571 N.YS.2d 686, 688, 575 N.E.2d 104 (1991). °8 Porter v. Commercial Casualty Ins. Co., 292 N.Y. 176, 183, 54 N.E.2d 353, 356 (1944) 6 signature is simply a witness. The terms are not supplied because they are so obvious as between the parties and these terms also become apparent to any reasonable observer examining the actions of the parties immediately following the signing of the contract. New York case law acknowledges that if intent must be determined from disputed evidence, a question of fact is presented.” Upon executing the agreement, the plaintiffs allege that they relinquished ownership and control of a business that was previously 30 mutually owned and controlled by both parties. The defendants became the sole beneficiaries of the business whereas the business was previously split evenly between plaintiffs and defendants.*! Bank statements, accountants, and the parties to the contract will attest to the fact that the business of ACS transferred ownership following the contract. While defendants deny these facts,” the very dispute of such facts that show the intent of the parties to obligate themselves to a contract indicates a clear question of fact that cannot be decided on the law. POINT THREE THE FACTS AS PRESENTED IN THE COMPLAINT PLAINLY STATE SEVERAL CAUSES OF ACTION. In ruling on a motion to dismiss, the court decides whether the plaintiff can succeed on any reasonable view of facts as stated and inferred.* If from the four corners of the complaint factual allegations are discerned which, taken together, manifest any cause of action cognizable at law, a motion to dismiss will fail.** In this case, even defendants’ own affirmation in support of the motion to dismiss acknowledges that the allegations in the complaint “assert claims sounding in what appears to be breach of contract, unjust enrichment, and wrongful transfer of assets.” a » Kenyon v. Delman, 38 F. Supp. 2d 107, 110 (N.D.N.Y. 1998), judgment aff'd, 198 F. 3d 233 (2d Cir. 1999) 5° Complaint, Par. 17, 21, and 39 3114. at Par. 21, 39, 45, and 46 * See generally, Defendants’ Answer 33 Campaign for Fiscal Equity, Inc. v. State, 86 N.Y.2d 307, 631 N.Y.S.2d 565 (1995) 34511 West 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 152, 773 N.E.2d 496, 746 N.Y.S.2d 131 (2002). ° Attorney’s Affirmation in Support of Motion to Dismiss, Par. 6 7 The court's function is to "accept ... each and every allegation forwarded by the plaintiff without expressing any opinion as to the plaintiff's ability ultimately to establish the truth of these averments before the trier of the facts." Thus, the pleading is to be liberally construed and the pleader afforded the benefit of every possible favorable inference. In the present case, the elements of a contract and breach of contract are plainly stated. The contract is for the sale of plaintiffs’ share of ACS in exchange for compensation from the defendants.*” The agreement was embodied in a writing, which can be clarified and corroborated by parole evidence and testimony, and the agreement can also be adduced from the conduct of the parties in performing on the agreement. The breach is simply defendants’ refusal to pay for plaintiffs’ share of the company at the appointed time, even though plaintiffs followed through on their obligations to relinquish their control and share in the company.*® The complaint also alleges facts that, if true, are sufficient to find the existence of implied or quasi contracts. A contract may be implied in fact where inferences may be drawn from the facts and circumstances of the case and the intention of the parties as indicated by their conduct.*? Contracts implied in fact result from the conduct of the parties and its existence may be established through proof of conduct of the parties recognizing and acting on the contract."° In the present case, the defendants took sole control of the company, including the taking of salaries, distributions, and other company funds into their sole control, whereas prior to the agreement such funds were split between the plaintiffs and defendants. 36919 Broadway Corp. v Alexander's, Inc., 46 NY2d 506, 509, 387 N.E.2d 1205, 414 N.Y.S.2d 889 [1979]). 3 7 See generally, Plaintiffs’ Complaint 38 Iq. 3° Pache v. Aviation Volunteer Fire Co., 20 A.D.3d 731, 800 N.Y.S.2d 228 (3d Dep’t 2005) 40 Apex Oil Co. v. Vangaurd Oil & Service Co. Inc., 760 F.2d 417, 422, 1 Fed. R. Serv. 3d 874, 40 U.C.C. Rep. Serv. 1221 (2d Cir. 1985); accord Bongat v. Fairview Nursing Care Center, Inc. v. Callaghan, 22 I-E.R. Cas. (BNA) 113, 2004 WL 758303 (S.D.N.Y. 2004); Lumhoo v. Home Depot USA, Inc., 299 F. Supp. 2d 121, 161 (E.D.N.Y. 2002) 8 In determining whether the parties entered into an agreement, a court should generally apply state-law principles governing the issue of contract formation."' Although plaintiffs have submitted into evidence a copy of the contract, dated and executed by the parties to this action, where the parties behave as though they have entered into a contract, a contract will come into existence whether or not the precise moment of agreement may be determined.” Plaintiffs intend to show the conduct of the parties was in accord with the sale contract through testimony from the company’s accountants, bank statements, and other financial records as may be gleaned from discovery. While defendants may deny these allegations, the questions are clearly ones for a trier of fact because if the facts are as plaintiffs purport them to be, there is a strong case for finding either an express contract or one implied in fact and in law, and breach of the contract (i.e. defendants’ refusal to pay which is stated numerous times in the plaintiffs’ complaint). CONCLUSION For all the foregoing reasons, as well as those submitted in the Attorney’s Affirmation in Opposition to the Motion to Dismiss,, defendants’ motion to dismiss this proceeding should be denied because there are questions of fact that whose answers can justify or invalidate causes of action and the case should proceed to trial where a trier of fact can determine the case on the merits. Dated: New York, New York January 16, 2014 A y for Plaintiffs ~~ By: David Estrakh, Esq. 1410 Broadway, Suite 2600 New York, N.Y. 10018 Mobile: (516) 765-5565 ‘| Specht v. Netscape Communications Corp., 306 F.3d 17, 27, 48 U.C.C. Rep. Serv. 2d 761 (2d Cir. 2002) * PCS Sales (USA), Inc. v. Nitrochem Distribution Ltd., 54 UCC Rep Serv2d 35 (S.D.N.Y. 1995)