• Motion for Summary Judgment Denied in Part and Granted in Part in Sons’ Suit Over the Management of their Deceased Father’s Real Estate Empire: Serota v Scimone
  • March 22, 2013 | Author: Adam M. Rafsky
  • Law Firm: Farrell Fritz, P.C. - Uniondale Office
  • In a January 10, 2013 decision by Justice Ramos, the court denied in part and granted in part the defendant Scimone’s motion to dismiss. The individual plaintiffs challenged the validity of a management agreement (“Agreement”) that related to various properties owned by their deceased father, Nathan Serota (“Serota”), entered into by Scimone and Serota. The plaintiffs alleged that Serota only executed the Agreement, which allegedly bestowed far more control and financial benefit in Scimone than their father truly intended, as a result of the unlawful collusion of Scimone and the other defendants, including Michael Cassidy, counsel for the entities which owned Serota’s properties. In support, the plaintiffs referenced and compared the Agreement to the contents of Serota’s will (“Will”), alleged that  the Serota consistently refused to sign the Agreement in the past, and explained that Agreement was executed three weeks prior to Serota’s death, at a time when he was failing physical and mental health. The complaint sought a declaration that the Agreement was null and void, and asserted causes of against Scimone for unjust Enrichment, against Cassidy for breach of fiduciary duty, and against Scimone for aiding and abetting Cassidy’s alleged breach of fiduciary duty.

    With respect to the declaratory judgment, the court held: that the plaintiffs had standing to challenge the validity of the Agreement as beneficiaries of Serota’s estate (“Estate”) and related trusts created by the Will; that the claim was timely as the Agreement was executed on April 8, 2010 and the action was commenced on April 5, 2012, falling within the two year statute of limitations period referred to by an arbitration clause contained in the Agreement; and that the plaintiffs presented a justiciable controversy regarding the validity of the Agreement. The court also held that the complaint adequately pled a claim for unjust enrichment. The court explained that the allegations sufficiently alleged that the plaintiffs were direct beneficiaries of the Will and managing members of the LLCs for which Scimone was to perform services under the Agreement, and that Simone deceived Serota into entering the Agreement, through which, and at the plaintiffs’ expense, Scimone was vested with greater financial benefits than provided for in the Will. 

    The court, however, held that the claim for breach of fiduciary duty against Cassidy could not stand because the plaintiffs failed to allege the Cassidy was a cause of the required element of damages. The court explained that the Agreement could have been executed without Cassidy’s participation so that there was no “reasonable connection between” his alleged undue influence in securing Serota’s signature “and the damage to which the plaintiff has suffered.” Therefore, the court also dismissed the claim for aiding and abetting breach of fiduciary duty against Scimone because such a claim requires the predicate breach of duty.

    Serota v Scimone,, Sup Ct, New York County, January 10, 2013, Ramos, J, Index No. 651117/12