Preview
FILED: NEW YORK COUNTY CLERK 01/29/2014 INDEX NO. 653476/2013
NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 01/29/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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PETER STERN and EXPRESS TRADE CAPITAL, INC.
Plaintiffs, Index No. 653476/2013
-against-
ATTORNEY’S AFFIRMATION
IN REPLY
OLEG ARDACHEV, AIR CARGO SERVICES L.L.C.,
DELEX INC., DELEX AIR CARGO, LLC, a Delaware
limited liability company, and DELEX AIR CARGO, LLC.
a Washington limited liability company.
Defendant.
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Robert Bondar, Esq., an attorney at law duly admitted to practice before the Courts in the State
of New York, hereby affirms the following to be true under the penalties of perjury:
1. I am the attorney for the Defendants OLEG ARDACHEV, DELEX INC., AIR CARGO
SERVICES, LLC, and DELEX AIR CARGO, LLC, (together hereinafter referred to as
‘DELEX’ or ‘Defendants’). As such, I am fully familiar with the facts and circumstances
surrounding this action.
2. I submit this affirmation in Reply to the allegations raised in Plaintiffs’ opposition to
Defendants’ motion to dismiss. Based on the following, Defendants’ motion must be
granted in all respects.
3. Defendants’ seek dismissal of only the first three causes of action of the Plaintiffs’
complaint, which expressly rely on the purported Sale Agreement (the “Sale
Agreement”), annexed to the Defendant’s motion as Exhibit 1, to state the cause of action
for breach of contract.
1
4. Defendants had not moved to dismiss Fourth and Fifth causes of action which, according
to the Affirmation of Plaintiff’s counsel, sound in unjust enrichment, promissory
estoppel, and fraudulent conveyances. In fact, defendants submitted their Answer on
November 20, 2013, thereby joining this action.
5. Defendants’ motion is premised on the fact that the document entitled Sales Agreement
and introduced by Plaintiff into evidence by annexing the same to the complaint is so
devoid of the material terms and so uncertain as to render it wholly void and
unenforceable. Defendants objection is directed purely to Plaintiffs contentions that the
Sales Agreement constitutes an express and written contract between the parties, the
terms whereof are enforceable in court. Defendants’ motion does not address questions of
fact, such as whether there was an implied-in-fact contract between the parties or whether
Defendant was unjustly enriched at the expense of Plaintiff.
6. The courts refuse to enforce a promise where it is as uncertain and lacks in specificity as
the Sale Agreement in question. See Joseph J. Martin, Jr., Delicatessen v. Schumacher,
436 N.Y.S.2d 247, 417 N.E.2d 541(1981), Mocca Lounge v. Misak, 94 A.D.2d 761, 462
N.Y.S.2d 704 (2 Dept. 1983) (“the void is too great, the omissions are too noticeable and
the risk of ensnaring a party in a set of contractual obligations that he never knowingly
assumed is too serious”).
7. “Definiteness as to material matters is of the very essence in contract law. Impenetrable
vagueness and uncertainty will not do.” Joseph J. Martin, Jr., Delicatessen citing 1
Corbin, Contracts, s 95, p. 394; 6 Encyclopedia of New York Law, Contracts, s 301;
Restatement, Contracts 2d, s 32, Comment (a).
8. Plaintiffs oppose Defendants’ motion to dismiss, which contends that the Sale Agreement
in question is not legally binding and enforceable by the Court due to lack of definiteness
and material terms contained therein. Plaintiffs assert that whether or not the contract has
2
been formed is a question of fact, which should be determined by a fact-finder at trial.
Plaintiffs further contend that they should be permitted to introduce parol evidence and
witness testimony to establish the existence of a valid and enforceable agreement
between the parties.
9. Plaintiffs’ contentions are incorrect. Although the intent to be bound may be a question of
fact, however whether the writing is sufficiently definite to state the existence of the
enforceable contract is a question of law – to be determined by the Court.
“Whether there is a valid contract, is usually a threshold question of law; and in our
opinion the existence of any future obligation resting on the parties under the agreement
is such a question of law.” Exercycle Corp. v. Maratta, 11 A.D.2d 677, 201 N.Y.S.2d 885
(1 Dept. 1960).
10. Even where the language of a contract is ambiguous, its interpretation remains the
exclusive function of the court unless “determination of the intent of the parties depends
on the credibility of extrinsic evidence or on a choice among reasonable inferences to be
drawn from extrinsic evidence”. Hartford Acc. & Indem. Co. v Wesolowski, 33 N.Y.2d
169 (1973). In the absence of any extrinsic evidence concerning communications during
contract negotiations, the issue of the parties' intent is one of law for the court. Id.
Plaintiffs submitted no such extrinsic evidence concerning communications of the parties
at the time the contracts were negotiated, in the forms of affidavits or otherwise. Bold
conclusory averments of Plaintiffs’ counsel that evidence in his possession “supports the
allegations made in the complaint”, without producing a shred of the same in opposition,
is plainly insufficient to deny the Court the power inherent to it to examine and interpret
contracts for legal sufficiency.
11. The Sale Agreement is alleged by Plaintiffs to be the express written contract between the
parties, whereby Plaintiff Stern sold his 50% of membership interest in the Defendant Air
3
Cargo Services, LLC (‘ACS’) to Defendant Ardashev. See Plaintiff’s Complaint at ¶¶23,
25, 40, Plaintiff’s Memorandum of Law at p. 2, 7, 8.
12. Defendants dispute that such a transfer ever took place and maintain that Plaintiff Stern
remains the owner of 50% of ACS until the present time. See Exhibit 2, Answer.
13. Plaintiff Stern is a sophisticated business person, having owned a number of businesses.
See Plaintiff’s Complaint, at ¶¶2, 22. Certainly, Stern knows that to complete a
transaction such as the sale of a business like ACS, the parties to such a transaction
would need to execute a number of documents, including a bill of sale, a corporate
resolution authorizing the transaction, and endorse the certificates of stock, to name only
a few. Plaintiff’s argument that the parties chose to enter into a “very simple” and “very
informal” agreement to avoid “unwinding of the business” or “complicated sale”, as
Plaintiffs argue in their Memorandum at page 4, has no merit. The agreement needed not
be complicated nor would ACS have to be unwound for the transaction to become
effective.
14. The Sale Agreement does not indicate the role of the three signatories to Sale Agreement
(it is impossible to ascertain from the four corners who the buyer, the seller, and the
witness were), it is wide open for any reasonable interpretation, and it sheds no light on
the subject matter of the agreement. As such, this Court may not invoke its power of law
to enforce a promise because the document is not “sufficiently certain and specific”.
Joseph J. Martin, Jr., Delicatessen v. Schumacher, 436 N.Y.S.2d 247, 417 N.E.2d
541(1981). “Otherwise, a court, in intervening, would be imposing its own conception of
what the parties should or might have undertaken, rather than confining itself to the
implementation of a bargain to which they have mutually committed themselves.” Id.
15. Defendant may be significantly prejudiced if found to be bound to the terms of the Sale
Agreement as they are interpreted by the interested party Plaintiff, without determining
4
what it was that Defendant specifically agreed to - and whether there were any condition
precedent that may have had excused Defendant’s performance. Self-serving allegations
of the Plaintiff and potentially biased testimony of the former employee of Defendant’s,
Arthur Hish, cannot fill in the glaring omissions in the document and bind the Defendant
to the terms, to which he never committed himself.
16. “The doctrine of definiteness or certainty is well established in contract law. In short, it
means that a court cannot enforce a contract unless it is able to determine what in fact the
parties have agreed to” Matter of 166 Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp.,
78 N.Y.2d 88 (1991).
17. Plaintiff urges the Court to admit extrinsic evidence to establish the existence of the
contract because “a court may look beyond the “four corners” of an agreement to
determine whether the missing term is actually essential”. Plaintiff’s Memorandum of
Law at p. 5, citing federal caselaw which is not binding authority upon this Court.
18. Plaintiff misses the fact that the terms of the Sale Agreement are not merely “ambiguous,
indefinite or uncertain” as per the holding of Korff v Corbett, 18 A.D.3d 248, 794
N.Y.S.2d 374, (1 Dept. 2005), whereby parol evidence would be admissible to determine
their meaning. Here, the subject matter of the document is not ambiguous or indefinite,
but rather it is completely missing from the document, rendering the Court unable to
interpret its meaning by relying on parol evidence to ascertain the meaning of nothing.
As such, the court cannot enforce this contract because it is wholly impossible to
determine “what in fact the parties have agreed to”. See Matter of 166 Mamaroneck Ave.
Corp., supra.
19. Here, the Court would have to insert the terms into the contract to make it enforceable,
which is precisely what the courts have repeatedly declined to do where “the void is too
great, the omissions are too noticeable and the risk of ensnaring a party in a set of
5
contractual obligations that he never knowingly assumed is too serious”. Mocca Lounge
v. Misak, 94 A.D.2d 761, 462 N.Y.S.2d 704 (2 Dept. 1983).
20. Plaintiffs attempt to confuse this Court by arguing in the alternative that the contract
exists between the parties, whether created “by an express written agreement” or contract
“implied in law or fact.” The Defendant’s motion specifically addresses the non-existence
of a written contract, annexed as Exhibit 1 to the Complaint, while leaving Plaintiff’s
allegations of fraudulent conveyance, promissory estoppel, and unjust enrichment to its
proof.
21. The express contract and implied contract claims are mutually exclusive. Bowne of New
York, Inc. v. International 800 Telecom Corp., 178 A.D.2d 138, 576 N.Y.S.2d 573
(1 Dept. 1991). “A contract cannot be implied in fact … where there is an express
contract covering the subject matter involved.” A & S Welding & Boiler Repair v Seigel,
93 A.D.2d 712, 460 N.Y.S.2d 582, (1 Dept. 1983) citing Miller v. Schloss 218 N.Y. 400
(1916). It thus follows then, that where there is an unenforceable express agreement in
writing, plaintiff cannot fall back on a theory that an implied contract exists instead.
22. Therefore, Defendants request that the Court dismisses those causes of action in the
Plaintiffs’ complaint that allege the existence of enforceable express written agreement
entitled the “Sale Agreement” and annexed to the complaint, and precluding Plaintiffs’
from introducing the “Sale Agreement” as evidence of the existence of the enforceable
express written agreement between the parties at trial.
DATED: Brooklyn, New York Respectfully submitted,
January 29, 2014 By: /s/ Robert Bondar
Robert Bondar, Esq.
Attorney for Defendants
28 Dooley Street, 3rd floor
Brooklyn, New York 11235
Telephone (347) 462-3262
6
Preview
FILED: NEW YORK COUNTY CLERK 01/29/2014 INDEX NO. 653476/2013 NYSCEF DOC. NO. 13 RECEIVED NYSCEF: 01/29/2014 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- ATTORNEY’S AFFIRMATION IN REPLY OLEG ARDACHEV, AIR CARGO SERVICES L.L.C., DELEX INC., DELEX AIR CARGO, LLC, a Delaware limited liability company, and DELEX AIR CARGO, LLC. a Washington limited liability company. Defendant. ------------------------------------------------------------------------X Robert Bondar, Esq., an attorney at law duly admitted to practice before the Courts in the State of New York, hereby affirms the following to be true under the penalties of perjury: 1. I am the attorney for the Defendants OLEG ARDACHEV, DELEX INC., AIR CARGO SERVICES, LLC, and DELEX AIR CARGO, LLC, (together hereinafter referred to as ‘DELEX’ or ‘Defendants’). As such, I am fully familiar with the facts and circumstances surrounding this action. 2. I submit this affirmation in Reply to the allegations raised in Plaintiffs’ opposition to Defendants’ motion to dismiss. Based on the following, Defendants’ motion must be granted in all respects. 3. Defendants’ seek dismissal of only the first three causes of action of the Plaintiffs’ complaint, which expressly rely on the purported Sale Agreement (the “Sale Agreement”), annexed to the Defendant’s motion as Exhibit 1, to state the cause of action for breach of contract. 1 4. Defendants had not moved to dismiss Fourth and Fifth causes of action which, according to the Affirmation of Plaintiff’s counsel, sound in unjust enrichment, promissory estoppel, and fraudulent conveyances. In fact, defendants submitted their Answer on November 20, 2013, thereby joining this action. 5. Defendants’ motion is premised on the fact that the document entitled Sales Agreement and introduced by Plaintiff into evidence by annexing the same to the complaint is so devoid of the material terms and so uncertain as to render it wholly void and unenforceable. Defendants objection is directed purely to Plaintiffs contentions that the Sales Agreement constitutes an express and written contract between the parties, the terms whereof are enforceable in court. Defendants’ motion does not address questions of fact, such as whether there was an implied-in-fact contract between the parties or whether Defendant was unjustly enriched at the expense of Plaintiff. 6. The courts refuse to enforce a promise where it is as uncertain and lacks in specificity as the Sale Agreement in question. See Joseph J. Martin, Jr., Delicatessen v. Schumacher, 436 N.Y.S.2d 247, 417 N.E.2d 541(1981), Mocca Lounge v. Misak, 94 A.D.2d 761, 462 N.Y.S.2d 704 (2 Dept. 1983) (“the void is too great, the omissions are too noticeable and the risk of ensnaring a party in a set of contractual obligations that he never knowingly assumed is too serious”). 7. “Definiteness as to material matters is of the very essence in contract law. Impenetrable vagueness and uncertainty will not do.” Joseph J. Martin, Jr., Delicatessen citing 1 Corbin, Contracts, s 95, p. 394; 6 Encyclopedia of New York Law, Contracts, s 301; Restatement, Contracts 2d, s 32, Comment (a). 8. Plaintiffs oppose Defendants’ motion to dismiss, which contends that the Sale Agreement in question is not legally binding and enforceable by the Court due to lack of definiteness and material terms contained therein. Plaintiffs assert that whether or not the contract has 2 been formed is a question of fact, which should be determined by a fact-finder at trial. Plaintiffs further contend that they should be permitted to introduce parol evidence and witness testimony to establish the existence of a valid and enforceable agreement between the parties. 9. Plaintiffs’ contentions are incorrect. Although the intent to be bound may be a question of fact, however whether the writing is sufficiently definite to state the existence of the enforceable contract is a question of law – to be determined by the Court. “Whether there is a valid contract, is usually a threshold question of law; and in our opinion the existence of any future obligation resting on the parties under the agreement is such a question of law.” Exercycle Corp. v. Maratta, 11 A.D.2d 677, 201 N.Y.S.2d 885 (1 Dept. 1960). 10. Even where the language of a contract is ambiguous, its interpretation remains the exclusive function of the court unless “determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence”. Hartford Acc. & Indem. Co. v Wesolowski, 33 N.Y.2d 169 (1973). In the absence of any extrinsic evidence concerning communications during contract negotiations, the issue of the parties' intent is one of law for the court. Id. Plaintiffs submitted no such extrinsic evidence concerning communications of the parties at the time the contracts were negotiated, in the forms of affidavits or otherwise. Bold conclusory averments of Plaintiffs’ counsel that evidence in his possession “supports the allegations made in the complaint”, without producing a shred of the same in opposition, is plainly insufficient to deny the Court the power inherent to it to examine and interpret contracts for legal sufficiency. 11. The Sale Agreement is alleged by Plaintiffs to be the express written contract between the parties, whereby Plaintiff Stern sold his 50% of membership interest in the Defendant Air 3 Cargo Services, LLC (‘ACS’) to Defendant Ardashev. See Plaintiff’s Complaint at ¶¶23, 25, 40, Plaintiff’s Memorandum of Law at p. 2, 7, 8. 12. Defendants dispute that such a transfer ever took place and maintain that Plaintiff Stern remains the owner of 50% of ACS until the present time. See Exhibit 2, Answer. 13. Plaintiff Stern is a sophisticated business person, having owned a number of businesses. See Plaintiff’s Complaint, at ¶¶2, 22. Certainly, Stern knows that to complete a transaction such as the sale of a business like ACS, the parties to such a transaction would need to execute a number of documents, including a bill of sale, a corporate resolution authorizing the transaction, and endorse the certificates of stock, to name only a few. Plaintiff’s argument that the parties chose to enter into a “very simple” and “very informal” agreement to avoid “unwinding of the business” or “complicated sale”, as Plaintiffs argue in their Memorandum at page 4, has no merit. The agreement needed not be complicated nor would ACS have to be unwound for the transaction to become effective. 14. The Sale Agreement does not indicate the role of the three signatories to Sale Agreement (it is impossible to ascertain from the four corners who the buyer, the seller, and the witness were), it is wide open for any reasonable interpretation, and it sheds no light on the subject matter of the agreement. As such, this Court may not invoke its power of law to enforce a promise because the document is not “sufficiently certain and specific”. Joseph J. Martin, Jr., Delicatessen v. Schumacher, 436 N.Y.S.2d 247, 417 N.E.2d 541(1981). “Otherwise, a court, in intervening, would be imposing its own conception of what the parties should or might have undertaken, rather than confining itself to the implementation of a bargain to which they have mutually committed themselves.” Id. 15. Defendant may be significantly prejudiced if found to be bound to the terms of the Sale Agreement as they are interpreted by the interested party Plaintiff, without determining 4 what it was that Defendant specifically agreed to - and whether there were any condition precedent that may have had excused Defendant’s performance. Self-serving allegations of the Plaintiff and potentially biased testimony of the former employee of Defendant’s, Arthur Hish, cannot fill in the glaring omissions in the document and bind the Defendant to the terms, to which he never committed himself. 16. “The doctrine of definiteness or certainty is well established in contract law. In short, it means that a court cannot enforce a contract unless it is able to determine what in fact the parties have agreed to” Matter of 166 Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp., 78 N.Y.2d 88 (1991). 17. Plaintiff urges the Court to admit extrinsic evidence to establish the existence of the contract because “a court may look beyond the “four corners” of an agreement to determine whether the missing term is actually essential”. Plaintiff’s Memorandum of Law at p. 5, citing federal caselaw which is not binding authority upon this Court. 18. Plaintiff misses the fact that the terms of the Sale Agreement are not merely “ambiguous, indefinite or uncertain” as per the holding of Korff v Corbett, 18 A.D.3d 248, 794 N.Y.S.2d 374, (1 Dept. 2005), whereby parol evidence would be admissible to determine their meaning. Here, the subject matter of the document is not ambiguous or indefinite, but rather it is completely missing from the document, rendering the Court unable to interpret its meaning by relying on parol evidence to ascertain the meaning of nothing. As such, the court cannot enforce this contract because it is wholly impossible to determine “what in fact the parties have agreed to”. See Matter of 166 Mamaroneck Ave. Corp., supra. 19. Here, the Court would have to insert the terms into the contract to make it enforceable, which is precisely what the courts have repeatedly declined to do where “the void is too great, the omissions are too noticeable and the risk of ensnaring a party in a set of 5 contractual obligations that he never knowingly assumed is too serious”. Mocca Lounge v. Misak, 94 A.D.2d 761, 462 N.Y.S.2d 704 (2 Dept. 1983). 20. Plaintiffs attempt to confuse this Court by arguing in the alternative that the contract exists between the parties, whether created “by an express written agreement” or contract “implied in law or fact.” The Defendant’s motion specifically addresses the non-existence of a written contract, annexed as Exhibit 1 to the Complaint, while leaving Plaintiff’s allegations of fraudulent conveyance, promissory estoppel, and unjust enrichment to its proof. 21. The express contract and implied contract claims are mutually exclusive. Bowne of New York, Inc. v. International 800 Telecom Corp., 178 A.D.2d 138, 576 N.Y.S.2d 573 (1 Dept. 1991). “A contract cannot be implied in fact … where there is an express contract covering the subject matter involved.” A & S Welding & Boiler Repair v Seigel, 93 A.D.2d 712, 460 N.Y.S.2d 582, (1 Dept. 1983) citing Miller v. Schloss 218 N.Y. 400 (1916). It thus follows then, that where there is an unenforceable express agreement in writing, plaintiff cannot fall back on a theory that an implied contract exists instead. 22. Therefore, Defendants request that the Court dismisses those causes of action in the Plaintiffs’ complaint that allege the existence of enforceable express written agreement entitled the “Sale Agreement” and annexed to the complaint, and precluding Plaintiffs’ from introducing the “Sale Agreement” as evidence of the existence of the enforceable express written agreement between the parties at trial. DATED: Brooklyn, New York Respectfully submitted, January 29, 2014 By: /s/ Robert Bondar Robert Bondar, Esq. Attorney for Defendants 28 Dooley Street, 3rd floor Brooklyn, New York 11235 Telephone (347) 462-3262 6