Court Opinion

ID: 9958719
Source: CourtListenerOpinion
Date Created: 2024-04-09 20:09:54.973903+00
Date Added: 2024-06-11T08:18:39.272287
License: Public Domain

Nyeu v Fong-Yee Nyeu
               2024 NY Slip Op 31137(U)
                      April 2, 2024
           Supreme Court, New York County
        Docket Number: Index No. 155350/2021
                  Judge: Paul A. Goetz
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                                     INDEX NO. 155350/2021
  NYSCEF DOC. NO. 149                                                                                          RECEIVED NYSCEF: 04/05/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. PAUL A. GOETZ                                              PART                              47
                                                                                      Justice
            ---------------------------------------------------------------------------------X   INDEX NO.          155350/2021
             LINCOLN T.K. NYEU,
                                                                                                 MOTION DATE         10/02/2023
                                                         Plaintiff,
                                                                                                 MOTION SEQ. NO.         003
                                                 -v-
             FONG-YEE NYEU, FONG-MING NYEU, KATHRYN NYEU,
                                                                                                   DECISION + ORDER ON
             JOHN DOE, JANE DOE
                                                                                                         MOTION
                                                         Defendants.
            ---------------------------------------------------------------------------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 003) 81, 82, 83, 84, 85,
            86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109,
            110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130,
            131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148
            were read on this motion to/for                                       SUMMARY JUDGMENT(AFTER JOINDER                   .

                      This action arises from a dispute between plaintiff and defendants over the purchase,

            ownership and management of a condominium unit located at 201 West 72nd Street Apartment

            17H, New York, New York, 10023 (“Condominium”). The Condominium is owned by plaintiff,

            Lincoln T.K. Nyeu’s two nieces defendants Fong-Yee Nyeu and Fong-Ming Nyeu (NYSCEF

            Doc No 1). Plaintiff’s four causes of action are for 1) Imposition of a Constructive Trust; 2) a

            Declaratory Judgement as to Ownership of the Condominium ; 3) Sale and Partition; and 4)

            Attorney’s Fees. Defendants have three counterclaims for 1) Accounting; 2) Breach of Fiduciary

            Duties; and 3) Unjust Enrichment. Defendants now move for summary judgment pursuant to

            CPLR § 3212 dismissing the complaint and to cancel the notice of pendency filed against the

            Condominium (NYSCEF Doc No 81). Plaintiff cross moves for summary judgment pursuant to

            CPLR § 3212 on his four causes of action and for summary judgment dismissing defendants’

            counterclaims.

             155350/2021 NYEU, LINCOLN T.K. vs. NYEU, FONG-YEE ET AL                                                Page 1 of 11
             Motion No. 003

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                                                      BACKGROUND

                    According to plaintiff in 1990 plaintiff’s father, Chang-Yao Nyeu, upon his death bequest

            an approximate sum of $300,000 (the “Fund”) to plaintiff and his two siblings, defendant

            Kathryn Nyeu, and Martin T. C. Nyeu (id.). The money was allegedly intended to be used by the

            siblings for the education of their children (id.). Plaintiff alleges that the siblings invested the

            money and it eventually grew to over $600,000 which was in a Credit Suisse Private Bank

            Account titled to Lincoln, Kathryn, and Martin jointly (id. at ¶ 11). Defendant Kathryn Nyeu

            claims to have no knowledge of the money left to her and her siblings. She also denies

            knowledge of the Credit Suisse bank account or of any alleged agreements among the siblings

            regarding the use of the money in this account.

                    Plaintiff alleges that in 2000, the siblings agreed to allow Martin to use the inheritance to

            purchase the Condominium so Martin’s daughter defendant Fong-Yee Nyeu would have a place

            to live while she attended graduate school at Columbia University (NYSCEF Doc No. 1 at ¶ 12

            and 35). Plaintiff alleges that because Martin did not want to complicate his tax issues, and

            because none of the siblings lived in New York the siblings agreed to put the deed in the names

            of Martin’s daughters Fong-Yee Nyeu and Fong-Ming Nyeu. (id. at ¶ 13-14) Plaintiff alleges

            that in exchange for agreeing to the purchase the siblings agreed they would all be a one third

            owners of the property. In his deposition plaintiff alleges that while the siblings did not produce

            any writings in accordance with this agreement that the understanding among them was that any

            purchase made using the Fund would be owned by the siblings in equal parts (NYSCEF Doc No

            85 at 158:25 – 169:11) Kathryn Nyeu denies that this agreement was ever made and does not

            claim to have an ownership interest in the Condominium (NYSCEF Doc No 98 at 38:11-14).

             155350/2021 NYEU, LINCOLN T.K. vs. NYEU, FONG-YEE ET AL                                 Page 2 of 11
             Motion No. 003

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                    In 2006, Fong-Yee finished her studies at Columbia and vacated the Condominium . That

            same year a power of attorney was executed giving plaintiff and his daughter, Fon-Lin Nyeu,

            authority to manage the Condominium (NYSCEF Doc No 94 ¶ 69). From the years 2005 – 2021,

            plaintiff and Fon-Lin collected rent, paid for repairs and maintenance, and made tax payments

            for the Condominium (id. at 82). After Martin’s death in 2018, plaintiff requested that Fong-

            Ming and Fong-Yee transfer the deed of the Condominium to him (id. at ¶ 88 – 92). On

            September 14, 2021, Fong-Yee and Fong-Ming revoked the power of attorney issued to plaintiff

            and Fon-Lin (id. at ¶ 93).

            Constructive Trust

                    Defendants move for summary judgment dismissing plaintiff’s first cause of action to

            impose a constructive trust on the Condominium. Plaintiff cross moves for summary judgment

            on the same cause of action. Plaintiff argues that imposing a constructive trust would be

            appropriate because he contributed a substantial amount of money to the purchase of the

            Condominium and relied on Martin’s promise that the Fund would be replenished. Since, Martin

            died without replenishing the Fund, plaintiff contends that a constructive trust would be an

            equitable remedy to prevent the unjust enrichment of defendants. Defendants dispute plaintiff’s

            contention that he was promised an ownership interest in the Condominium and argue that a

            constructive trust would grant plaintiff an interest in the Condominium to which he is not

            entitled.

                    “[I]t may be appropriate to impose a constructive trust in situations when property has

            been acquired in such circumstances that the holder of the legal title may not in good conscience

            retain the beneficial interest” (Homapour v Harounian, 182 AD3d 426, 427 [1st Dept 2020]).

            “The elements necessary for the imposition of a constructive trust are a confidential or fiduciary

             155350/2021 NYEU, LINCOLN T.K. vs. NYEU, FONG-YEE ET AL                             Page 3 of 11
             Motion No. 003

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            relationship, a promise, a transfer in reliance thereon, and unjust enrichment (Abacus Fed. Sav.

            Bank v Lim, 75 AD3d 472, 473 [1st Dept 2010]). However, “courts have observed that a

            constructive trust may be imposed even where some of these traditional elements are not

            present” (ELM Suspension Sys., Inc. v 45 E. 33rd St. Condominium minium, 201 AD3d 498, 499

            [1st Dept 2022]). “[T]hese factors, or elements, serve only as a guideline … because the

            constructive trust doctrine is given broad scope to respond to all human implications of a

            transaction in order to give expression to the conscience of equity and to satisfy the demands of

            justice” (Sanxhaku v Margetis, 151 AD3d 778, 779 [2d Dept 2017]). Therefore, all the factors

            must be examined without any one being dispositive.

            Confidential Relationship

                   Here, plaintiff alleges that he and his brother Martin had a confidential or fiduciary

            relationship with respect to the Fund that their father allegedly left to them. “A confidential

            relationship exists between two parties where they ... deal on unequal terms due to one party's

            weakness, dependence or trust justifiably reposed upon the other” (Matter of Neumann, 210

            AD3d 492, 493 [1st Dept 2022]). A confidential relationship often exists in familial

            relationships, considering the trust close family members have in one another (Rowe v Kingston,

            94 AD3d 852, 853 [2d Dept 2012]; see also In re Wicks' Estate, 7 Misc 2d 407, 408 [Sur Ct

            1957] [“By virtue [of familial relationship], a relationship of confidence and trust existed

            between them”]). Considering the siblings’ relationship and the alleged common purpose of the

            Fund, which the siblings purportedly agreed that they had a duty to replenish, a confidential

            relationship could very well have existed between Martin and Lincoln.

                   While Fong-Yee Nyeu and Fong-Ming Nyeu did not have an interest in the Fund, when

            “a relationship of trust and confidence [exists] between the parties … the defendant must be

             155350/2021 NYEU, LINCOLN T.K. vs. NYEU, FONG-YEE ET AL                               Page 4 of 11
             Motion No. 003

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            charged with an obligation not to abuse the trust and confidence placed in her by the plaintiff”

            (Sharp v Kosmalski, 40 NY2d 119, 122 [1976]). Defendants admit in their answer that a

            confidential and fiduciary relationship exists among the parties based on their familial

            relationship and that plaintiff had power of attorney over the Condominium from 2006 until

            2021 (NYSCEF Doc No 117).

            Promise

                   “Even without an express promise … courts of equity have imposed a constructive trust

            upon property transferred in reliance upon a confidential relationship” (Sharp v Kosmalski, 40

            NY2d 119, 122 [1976]). “A promise may be implied or inferred from the very transaction itself”

            (id.). As proof of the existence of this promise plaintiff submits a letter written from Martin in

            which he states:

                            If I use the Boston house as collateral to pay for the New York
                            house, after completing the paperwork I can repay our parents' fund
                            or your money. Also, after getting the deed for the New York house
                            I can apply for a loan. This is my rough idea. I still don't know how
                            much money will be lacking after November 7, but if you agree I
                            can borrow more, I will propose another plan.

            (NYSCEF Doc No 131). CPLR § 4519 known as the “Dead Man’s Statute” prevents a person

            from testifying on conversations they had with a deceased person if the content of that

            conversation is being presented as evidence to support a claim on property that would be

            transferred to the testifying party. While, “The Dead Man's Statute does not, by its terms,

            prohibit the introduction of documentary evidence” the document must still be authenticated by a

            non-interested party (Acevedo v Audubon Mgt., Inc., 280 AD2d 91, 95 [1st Dept 2001]). While

            the spouse of a person with a property claim is not barred from testifying or authenticating

            documentary evidence, their testimony should be “scrutinized carefully [due to] the interest

            which the witness had in the outcome of the controversy” (In re Block's Estate, 258 AD 342, 345

             155350/2021 NYEU, LINCOLN T.K. vs. NYEU, FONG-YEE ET AL                                Page 5 of 11
             Motion No. 003

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            [1st Dept 1940]). Here, the letter was authenticated by Tzih L. Nyeu, plaintiff’s wife (NYSCEF

            Doc No 139).

                    In addition to the letter, plaintiff offers his own testimony that there was an agreement as

            to the purpose of the account, and that there was a mutual understanding between plaintiff and

            Martin that if funds from the account were used, they would be replenished (NYSCEF Doc No

            142 at 13). However, defendants offer an affidavit by Kathryn Nyeu, in which she states that she

            was not aware of an account left to her and her brothers by their parents, nor was she aware of an

            agreement among the siblings about the money plaintiff alleges was withdrawn from the account

            to purchase the Condominium (NYSCEF Doc No 124 ¶ 5 – 12). It also must be noted that

            Martin does not promise in the letter purportedly written by him that plaintiff will have an

            ownership interest in the Condominium. Rather, the promise was that the Fund would be

            replenished at a later date.

            Transfer in Reliance

                    In addition to showing proof of the promise itself, plaintiff must also prove that a transfer

            of property was made in reliance on that promise (Abacus, 75 AD3d at 473). Defendants argue

            that this element cannot be met because plaintiff never had an interest in the property prior to

            obtaining a promise from Martin. Defendants rely on Bontecou v Goldman, where the Second

            Department stated:

                            In order to establish that there was a transfer in reliance on the
                            promise, it must be shown that the party seeking to impose the
                            constructive trust had some interest in the property prior to obtaining
                            the promise that the property would be conveyed, and that this
                            interest was parted with in reliance on the promise.

            (Bontecou v Goldman, 103 AD2d 732, 733 [2d Dept 1984]).

             155350/2021 NYEU, LINCOLN T.K. vs. NYEU, FONG-YEE ET AL                                  Page 6 of 11
             Motion No. 003

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                      However, the facts in Bontecou differ significantly from the case here. In Bontecou

            plaintiffs sought the imposition of a constructive trust over a parcel of land that was purchased

            by defendants without any financial contribution by plaintiffs (id. at 732). Plaintiffs in Bontecou

            argued that they relied on a promise by defendants that after defendants purchased the property

            they would later convey a portion of the property to plaintiffs (id.).

                      In contrast, here plaintiff alleges that the Condominium was purchased with funds which

            plaintiff only agreed to provide based upon Martin’s promise that he would replenish the Fund.

            The instant case is more similar to Kohan v Nehmadi where a constructive trust was imposed

            when, “plaintiff claim[ed] that defendants promised him an interest in certain real property, that

            he had made payments and expended monies in reliance of that promise, that defendants were

            unjustly enriched at plaintiff's expense, given that certain conveyances transferred less property

            to him than what he claims he was promised” (Kohan v Nehmadi, 130 AD3d 429, 430 [1st Dept

            2015]).

                      As in this case the plaintiffs in Kohan did not have an interest in the property prior to

            making payments to the defendants, however the court still found a constructive trust appropriate

            because they did contribute money in reliance on a promise that they would receive an interest in

            the property. However, as noted above, the promise which plaintiff allegedly relied on was not

            for an ownership stake in the apartment, but rather that the money withdrawn from the account

            would eventually be paid back.

            Unjust Enrichment

                      As to the factor of unjust enrichment, a party must show “(1) the other party was

            enriched, (2) at that party's expense, and (3) that it is against equity and good conscience to

            permit [the other party] to retain what is sought to be recovered” (Marini v Lombardo, 79 AD3d

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             Motion No. 003

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            932, 934 [2d Dept 2010]). “A person may be deemed to be unjustly enriched if he (or she) has

            received a benefit, the retention of which would be unjust” (Sharp, 40 NY2d at 123). “A

            conclusion that one has been unjustly enriched is essentially a legal inference drawn from the

            circumstances surrounding the transfer of property and the relationship of the parties” (id.).

                   Here, whether defendants were unjustly enriched depends upon the understanding among

            the parties regarding the purchase and management of the Condominium. Plaintiff alleges that

            defendants were aware that the Condominium was a family asset that was to be shared by him

            and his two siblings which is why he agreed to release funds to purchase it. If plaintiff’s account

            is accurate then defendants may have been unjustly enriched. However, if defendants’ contention

            is accurate and the Condominium was purchased for Fon-Yee and Fon-Ming by Martin, then

            they would not have been unjustly enriched at plaintiff’s expense.

            Consideration of the Factors

                   As no one factor is dispositive when considering the imposition of a constructive trust, all

            the factors must be considered. Neither plaintiff nor defendants have established a prima facie

            showing that a constructive trust should or should not be imposed. Since there is a dispute as to

            the nature of the transfer of money from the Fund to Martin, the credibility of the parties is the

            critical factor in resolving these issues. “It is not the function of a court deciding a summary

            judgment motion to make credibility determinations” (Vega v Restani Const. Corp., 18 NY3d

            499, 505 [2012]; see also Baker v Harrison, 180 AD3d 1210 [3d Dept 2020] [denying summary

            judgement for the imposition of a constructive trust because credibility of the parties was at

            issue]). Accordingly, since resolution of the factual disputes largely involves credibility

            determinations, summary judgment on plaintiff’s first cause of action for the imposition of a

            constructive trust is inappropriate and must be denied.

             155350/2021 NYEU, LINCOLN T.K. vs. NYEU, FONG-YEE ET AL                               Page 8 of 11
             Motion No. 003

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            Declaratory Judgment and Partition

                      Since plaintiff’s second cause of action for a declaratory judgment regarding the

            ownership of the Condominium, and his third cause of action for partition, depend on resolution

            of the same factual issues as plaintiff’s first cause of action for the imposition of a constructive

            trust, summary judgment will be denied as to plaintiff’s second and third causes of action as

            well.

            Accounting Counterclaim

                      Defendants, Fong-Ming, Fong-Yee, and Kathryn Nyeu’s first counterclaim seeks an

            accounting for all funds handled and all acts performed by plaintiff and Fon-Lin as their agents

            while managing the Condominium. “An equitable accounting involves a remedy designed to

            require a person in possession of financial records to produce them, demonstrate how money was

            expended and return pilfered funds in his or her possession” (Metro. Bank & Tr. Co. v Lopez,

            189 AD3d 443, 446 [1st Dept 2020]). “In order to enlist the aid of a court ... in vindicating the

            right to an accounting a plaintiff must show a demand for an accounting and a failure or refusal

            by the [party] with the books, records, profits or other assets of the partnership in his possession

            to account to the [parties]” (Blaustein v Lazar Borck & Mensch, 161 AD2d 507, 508 [1st Dept

            1990]).

                      Plaintiff argues that defendants never made a demand for an accounting and therefore the

            claim should be dismissed. However, plaintiff does not submit an affidavit stating he never

            received such correspondence and only makes the argument in his memorandum of law.

            Accordingly, summary judgment on defendants’ first counterclaim for an accounting will be

            denied.

             155350/2021 NYEU, LINCOLN T.K. vs. NYEU, FONG-YEE ET AL                                Page 9 of 11
             Motion No. 003

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            Breach of Fiduciary Duty and Unjust Enrichment Counterclaims

                   Defendants, Fong-Ming, Fong-Yee, and Kathryn Nyeu, assert two additional

            counterclaims for a breach of fiduciary duty, and for unjust enrichment, alleging that plaintiff has

            retained funds collected from renting the Condominium, which he was to hold for Fong-Ming

            and Fong-Yee’s benefit. The elements of a cause of action to recover damages for breach of

            fiduciary duty are “(1) the existence of a fiduciary relationship, (2) misconduct by the defendant,

            and (3) damages directly caused by the defendant's misconduct” (LMEG Wireless, LLC . Farro,

            190 AD3d 716, 720 (2nd Dept 2021). The elements of an unjust enrichment claim are “(1) the

            other party was enriched, (2) at that party's expense, and (3) that it is against equity and good

            conscience to permit [the other party] to retain what is sought to be recovered” (Marini, 79

            AD3d 934).

                   Defendants argue that plaintiff breached his fiduciary duty to them, and unjustly enriched

            himself, by not distributing the rent he collected on their behalf to them when he was managing

            the Condominium. Plaintiff opposes and argues that the parties had agreed that he was entitled to

            retain the profits derived from the Condominium. Again, there are unresolved issues of fact that

            will require credibility determinations. Accordingly, summary judgment will be denied on

            defendants’ second and third counterclaims.

            Notice of Pendency

                   Defendants correctly argue that the notice of pendency should be canceled pursuant to

            CPLR § 6514 (a). CPLR § 6514 (a) provides, in relevant part, that "[t]he court, upon motion of

            any person aggrieved and upon such notice as it may require, shall direct any county clerk to

            cancel a notice of pendency, if service of a summons has not been completed within the time

            limited by section 6512." “CPLR § 6512 provides that a notice of pendency is only effective if a

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             Motion No. 003

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            summons is served upon the defendant within 30 days after filing” (Knopf v Sanford, 132 A.D.3d

            416, 417 [1st Dept 2015]). Here, plaintiff failed to serve defendants within the 30-day period.

            Plaintiff filed the Summons and the Notice of Pendency on June 3, 2001 (NYSCEF Doc Nos 1 &

            2). However, plaintiff did not serve the Summons and the Notice of Pendency on defendants’

            Fong-Yee and Fong-Ming until August 5, 2021 (NYSCEF Doc Nos 5 & 6) - sixty-three days

            after filing the Summons and Notice of Pendency. Accordingly, the County Clerk will be

            directed to cancel the Notice of Pendency filed June 3, 2021 in this action.

                    Accordingly, it is,

                    ORDERED that defendants motion for summary judgment and to cancel the Notice of

            Pendency filed on June 3, 2021 is granted to the extent that the County Clerk of New York

            County, upon service upon him of a copy of this order with notice of entry, shall cancel the

            notice of pendency filed by plaintiff on June 3, 2021, and the motion is otherwise denied; and it

            is further

                    ORDERED that such service upon the County Clerk shall be made in accordance with the

            procedures set forth in the Protocol on Courthouse and County Clerk Procedures for

            Electronically Filed Cases (accessible at the “E-Filing” page on the court’s website at the address

            www.nycourts.gov/supctmanh)]; and it is further

                    ORDERED that plaintiff’s cross-motion for summary judgment is denied in its entirety.

                     4/2/2024
                      DATE                                                          PAUL A. GOETZ, J.S.C.
             CHECK ONE:                   CASE DISPOSED                X   NON-FINAL DISPOSITION

                                          GRANTED             DENIED   X   GRANTED IN PART             OTHER

             APPLICATION:                 SETTLE ORDER                     SUBMIT ORDER

             CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN       FIDUCIARY APPOINTMENT       REFERENCE

             155350/2021 NYEU, LINCOLN T.K. vs. NYEU, FONG-YEE ET AL                                Page 11 of 11
             Motion No. 003

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