Court Opinion

ID: 9930964
Source: CourtListenerOpinion
Date Created: 2024-02-07 21:09:03.593474+00
Date Added: 2024-06-11T12:09:32.239712
License: Public Domain

BLS Holdco, LLC v Kushner Cos., LLC
               2024 NY Slip Op 30382(U)
                    February 1, 2024
           Supreme Court, New York County
        Docket Number: Index No. 652944/2023
                  Judge: Lyle E. Frank
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.
 [FILED: NEW YORK COUNTY CLERK 02/02/2024 12:43 P~                                                                    INDEX NO. 652944/2023
  NYSCEF DOC. NO. 27                                                                                            RECEIVED NYSCEF: 02/02/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. LYLE E. FRANK                                               PART                              11M
                                                                                       Justice
            ----------------------------------------------------------------- ----------------X   INDEX NO.          652944/2023
             BLS HOLDCO, LLC,
                                                                                                  MOTION DATE         10/06/2023
                                                         Plaintiff,
                                                                                                  MOTION SEQ. NO.         001
                                                 - V -

             KUSHNER COMPANIES, LLC, LAURENT MORALI                                                 DECISION + ORDER ON
                                                                                                          MOTION
                                                         Defendant.
            ------------------------------------------------------------------- --------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 001) 8, 9, 10,
            11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21
            were read on this motion to/for                                                         DISMISS

            Background

                      This action arises out of a dispute involving a 2014 real estate investment transaction.

            PlaintiffBLS HOLDCO, LLC ("Plaintiff') is a Delaware limited liability company, and a

            member of nonparty BLS ASSOCIATES LLC, also a Delaware limited liability company.

            Defendant Kushner ("Defendant Kushner") is a real estate investment firm, incorporated in

            Delaware, with its principal place of business at 767 Fifth Avenue New York, NY. Defendant

            Laurent Morali ("Defendant Morali") is an individual and senior management of Kushner.

                      Plaintiff alleges that in October 2013, the parties began discussions about a potential joint

            venture acquisition of a group of residential properties owned by Brooklyn Law School. Three of

            the properties, 27 Monroe Place, 38 Monroe Place and 100 Pierrepont Street were vacant

            townhouses that were to be converted into single-family townhouses and then sold. The three

            remaining properties were multifamily buildings located at 89 Hicks Street, 18 Sidney Place and

             652944/2023 BLS HOLDCO, LLC vs. KUSHNER COMPANIES, LLC ET AL                                            Page 1 of 13
             Motion No. 001

                                                                           1 of 13
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            144 Willow Street which were to be renovated and then rented at market rates. Plaintiff alleges

            on around March 2014, Defendants sent a final business plan to potential investors, including

            Plaintiff, seeking their investment in the acquisition of the six properties. To facilitate the joint

            venture, the parties created BLS Associates LLC, whose members include Plaintiff, a Delaware

            LLC, and nonparty K-BLS Portfolio, a Delaware LLC. The operating agreement defines K-BLS

            Portfolio as a subsidiary of Kushner. To fund the acquisition of these properties and the costs of

            initial renovations, BLS Associates obtained a $36.5 million credit facility. In addition, BLS

            Associates' members invested approximately $12.6 million in equity, with approximately $9.3

            million or 73%, of the investment from Plaintiff.

                    The first of the three Townhouses was sold in May 2017 for $12.9 million and the other

            two Townhouses sold in 2021 for $7.65 million and $6.425 million, respectively. Plaintiff

            alleges that in 2016, prior to the sale of the first townhouse major problems had arisen one of the

            townhouses due to poor workmanship by the general contractor and poor oversight by

            Defendant. Plaintiff contends that Defendant then informed Plaintiff there was a need to secure

            extra funds to fix the problems. Plaintiff further alleges that despite attempts to obtain

            information from Defendant, Defendant failed to provide correct information to Plaintiff and

            made false assertions regarding Plaintiff's investment. Plaintiff alleges Defendant Kushner added

            an additional $3.2 million dollar debt into the deal without plaintiff's knowledge or consent.

            Plaintiff further alleges that Defendant Kushner failed to account for a loan repayment when

            reporting on its loan for the Townhouse renovations which caused Defendant to receive

            overpayments in excess of $650,000.

                    Plaintiff further alleges that Defendant Kushner expressly represented to Plaintiff that

            only seven of the 77 units in the Multifamily Properties were rent stabilized but that the

             652944/2023 BLS HOLDCO, LLC vs. KUSHNER COMPANIES, LLC ET AL                            Page 2 of 13
             Motion No. 001

                                                           2 of 13
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            remaining 70 units could be rented at market rates. Plaintiff alleges it was only several years

            later, after it had already invested in the project, that it found out all the 77 units were subject to

            rent-stabilization. In August 2017, the tenants of one of the multifamily homes filed a putative

            class action alleging that Defendant improperly deregulated their units in violation of rent

            stabilization laws. Plaintiff alleges that it found out about the lawsuit not through defendant but

            through the media, and when it confronted Defendants, they claimed the lawsuit was frivolous.

            On April 19, 2022, Plaintiff alleges a representative of Defendant Kushner forwarded an internal

            email to plaintiff which stated that Kushner had not followed necessary procedures to register the

            units upon acquisition of the Multifamily Properties.

                    Plaintiff alleges that as a result of Defendant's conduct, the parties' joint venture was a

            failure, causing Plaintiff to suffer significant economic loss. Thus, plaintiff commenced this suit

            against Defendants asserting claims for breach of fiduciary duty, unjust enrichment, accounting,

            and aiding and abetting breach of fiduciary duty against Defendant Morali. Defendants now

            move to dismiss plaintiff's complaint on the basis that Plaintiff's claims are time barred pursuant

            to Delaware's applicable statute of limitations and further as Plaintiff has failed to plead each

            cause of action.

            Standard of Review

                    Plaintiff moves to dismiss the complaint pursuant to both CPLR 321 l(a)(5) and (a)(7). It

            is well-settled that on a motion to dismiss for failure to state a cause of action pursuant to CPLR

            321 l(a)(7), the pleading is to be liberally construed, accepting all the facts as alleged in the

            pleading to be true and giving the plaintiff the benefit of every possible inference. (See Avgush v

            Town of Yorktown, 303 AD2d 340, 755 N.Y.S.2d 647 [2d Dept 2003]; Bernberg v Health Mgmt.

             652944/2023 BLS HOLDCO, LLC vs. KUSHNER COMPANIES, LLC ET AL                             Page 3 of 13
             Motion No. 001

                                                           3 of 13
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            Sys., 303 AD.2d 348, 756 N.Y.S.2d 96 [2d Dept 2003]). "The test on a motion to dismiss for

            insufficiency of the pleadings is not whether the plaintiff has artfully drafted the complaint but

            whether, deeming the complaint to allege whatever can be reasonably implied from its

            statements, a cause of action can be sustained." (Pepler v Coyne, 33 AD3d 434,435, 822

            N.Y.S.2d 516 [1st Dept 2006], citing Stendig, Inc. v Thom Rock Realty Co., 163 AD2d 46, 48,

            558 N.Y.S.2d 917 [1st Dept 1990]).

            Discussion

               I.        Statute of Limitations

                      Primarily, Defendants contend Plaintiffs claims are untimely pursuant to CPLR 202,

            New York's "borrowing statute." Defendants argue under CPLR 202, plaintiffs claims are

            subject Delaware's relevant statute of limitations as Plaintiff is a non-resident incorporated in

            Delaware. In opposition, Plaintiff contends it was New York resident at the time its claims

            accrued, and therefore pursuant to CPLR 202, New York's relevant statute of limitations must

            govern.

                      Under CPLR 202, when a nonresident sues on a cause of action accruing outside New

            York, the cause of action must be timely under both New York's applicable statute of limitation

            and that of the jurisdiction where the cause of action accrued. ( Glob. Fin. Corp. v. Triarc Corp.,

            93 N.Y.2d 525, 715 N.E.2d 482 [1999]). When another state's statute oflimitations is

            "borrowed" pursuant to CPLR 202, the Court must enforce the shorter period of the two.

            (Freedom Tr. 2011-2 v. HSBC Bank USA, NA., 214 A.D.3d 404, 184 N.Y.S.3d 340 [1st Dept

            2023 ]). When an alleged injury is purely economic, the place of injury usually is where the

            plaintiff resides and sustains the economic impact of the loss and a partnership's legal residence

             652944/2023 BLS HOLDCO, LLC vs. KUSHNER COMPANIES, LLC ET AL                         Page 4 of 13
             Motion No. 001

                                                          4 of 13
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            is where it maintains its principal place of business. (See Proforma Partners, LP v. Skadden Arps

            Slate Meagher & Flom, LLP, 280 A.D.2d 303, 720 N.Y.S.2d 139 [1st Dept 2001]). Thus,

            whether the Court will apply the applicable Delaware or New York statute of limitations, hinges

            on whether as a matter oflaw, Plaintiff is deemed a resident of New York. The burden of

            proving residency is upon the party seeking to take advantage of the New York statute."

            (Interventure 77 Hudson LLC v. Falcon Real Est. Inv. Co., 172 A.D.3d 481,482 [1st Dep't

            2019]).

                      New York Courts have repeatedly held that for purposes of CPLR 202, a Plaintiff is a

            "resident" of, and its cause of action accrues in the state of its incorporation. ( Verizon

            Directories Corp. v. Continuum Health Partners, Inc., 74 A.D.3d 416, 902 N.Y.S.2d 343 [1st

            Dept 2010]; Interventure 77 Hudson LLC v. Falcon Real Est. Inv. Co., 172 A.D.3d 481,482 [1st

            Dep't 2019]). In Global Fin. Corp, the Court of Appeals rejected a plaintiffs argument that it

            should apply the New York Statute of Limitations applies because its claims accrued in New

            York, where the contract was negotiated, executed, substantially performed, and

            breached. (Glob. Fin. Corp. v. Triarc Corp., 93 N.Y.2d 525, 715 N.E.2d 482 [1999]).

                      Here, Plaintiff contends it is a resident of New York State or at the very least there is a

            question of fact as to Plaintiffs residency, rendering dismissal inappropriate. Plaintiff reasons it

            is a resident of New York because the economic injury it alleges it suffered is related entirely to

            its investment in, and losses on, properties located in New York and Defendant's actions which

            occurred in New York. The Court disagrees.

                      While on a motion to dismiss the Court will afford Plaintiff all favorable inferences, here

            Plaintiff has made no indication that its principal place of business is located in New York. The

            cases Plaintiffs point to do not demonstrate otherwise. In Oxbow, the First Department found that

             652944/2023 BLS HOLDCO, LLC vs. KUSHNER COMPANIES, LLC ET AL                             Page 5 of 13
             Motion No. 001

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            plaintiffs primary residence was a factual issue that could not be determined on a motion to

            dismiss. (Oxbow Calcining USA Inc. v. Am. Indus. Partners, 96 A.D.3d 646, 948 N.Y.S.2d 24

            [1st Dep't 2012]). However, there, plaintiff alleged that while its offices were currently in

            Florida, at the time the cause of action accrued its principal place of business was located at an

            office building in Manhattan. Here, there is so such issue of fact. Moreover, in Verizon, the First

            Department rejecedt plaintiffs contention that, for purposes of the statute, it is a "resident" of

            New York, or that its cause of action accrued in this state, by virtue of its authorization to do

            business and asserted extensive presence here. (Verizon, A.D.3d). Here, plaintiff similarly

            conflates business activities with an established New York principal place of business.

            Therefore, the Court finds that pursuant to CPLR 202, as Plaintiff is a non-resident incorporated

            in Delaware, the Court will apply Delaware's applicable statute of limitations.

                II.      First Cause of Action for Breach of Fiduciary Duty

                      Defendant argues that as Plaintiffs allegations stem from Defendant's alleged conduct in

            2013 and 2014 when the parties entered into the venture and Plaintiffs lawsuit was filed in

            August 2023, the claims are clearly time barred pursuant to Delaware's three-year statute of

            limitations. Plaintiff argues that although Defendant's initial misconduct began in 2013 and

            2014, due to Defendant's fraud, Plaintiff was not aware of the misconduct until later, tolling the

            statute of limitations until that time.

                      Under Delaware law, the statute of limitations for breach of fiduciary duty, aiding and

            abetting breach of fiduciary duty, and unjust enrichment is three years. 10 Del. C. § 8106. Under

            Delaware law, the cause of action accrues "at the moment of the alleged harmful act." (Am. Int 'l

            Grp., Inc. v. Greenberg, 965 A.2d 763, 811-12 [Del. Ch. 2009]; Jepsco, Ltd. v. B.F. Rich Co.,

            No. CIV.A. 7343-VCP, 2013 WL 593664 [Del. Ch. Feb. 14, 2013]). This is true even if the

             652944/2023 BLS HOLDCO, LLC vs. KUSHNER COMPANIES, LLC ET AL                          Page 6 of 13
             Motion No. 001

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            plaintiff is unaware of the cause of action or the harm. (See In re Tyson Foods, Inc. Consol.

            S'holder Litig., 919 A.2d 563,584 [Del. Ch. 2007]; Isaacson, Stolper & Co. v. Artisans' Sav.

            Bank, 330 A.2d 130 [Del. 1974]). However, under the doctrine of fraudulent concealment, the

            statute of limitations may be tolled if there was an affirmative act of concealment or some

            misrepresentation that was intended to 'put a plaintiff off the trial of inquiry' until such time as

            the plaintiff is put on inquiry notice. (In re Nine Sys. Corp. S'holders Litig., No. CV 3940-VCN,

            2013 WL 4013306 [Del. Ch. July 31, 2013]). The statute oflimitations begins to run when

            plaintiffs should have discovered the general fraudulent scheme but is tolled until such time that

            persons of ordinary intelligence and prudence would have facts sufficient to put them on inquiry

            which, if pursued, would lead to the discovery of the injury. Id.

                   Here, Plaintiff argues that although the fraudulent representations were initially made in

            2014, 2016 and 2019, Plaintiff could not have discovered them until April 2022, due to the

            defendant's fraudulent concealment. Plaintiff alleges that as late as 2018 Defendants were

            making false claims as to when they learned about the rent stabilization laws went into effect and

            their impact on the investment. Therefore, the Court finds with respect to plaintiffs claims

            stemming from allegations that defendant breached its fiduciary duty in mispresenting the rent

            stabilization subject, Defendant has failed to establish that Plaintiffs' claims are time barred as a

            matter oflaw. Plaintiff alleges defendant fraudulently concealed such conduct until April 2022

            when plaintiff was forwarded an email by defendant which stated that Kushner had not followed

            necessary procedures to register the units upon acquisition of the Multifamily Properties.

            Although Plaintiff concedes it learned about the 2017 lawsuit through the media, it alleges that

            defendant consistently referred to the lawsuits by using terms such as "run-of-the-mill,"

            "punitive," and "politically motivated," and claims Mr. Morali personally provided assurances

             652944/2023 BLS HOLDCO, LLC vs. KUSHNER COMPANIES, LLC ET AL                           Page 7 of 13
             Motion No. 001

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            upon which Plaintiff relied on. Providing Plaintiff with all favorable inferences, this fraudulent

            concealment would toll the statute of limitations until April 2022

                    However, with respect to Plaintiffs allegations surrounding the townhouses, the Court

            finds Plaintiffs claims are time barred. First, Plaintiff alleges the 27 Monroe Townhouse was

            sold for significantly less than it was supposed to, however this sale occurred in 2017. Plaintiff

            has not made a sufficient allegation that this was fraudulently concealed, and as such to the

            extent that Plaintiffs claim is based on this sale, it is time barred. Next, plaintiffs allegations

            that during the time of these renovations in there was mismanagement of the renovation process,

            is again outside of the three-year statute of limitations and thus time barred. However, Plaintiff

            has alleged that Defendant concealed its repayment of a loan to itself, and Plaintiff did not

            become aware of this until 2021 as it was in Defendant's control. Therefore, this claim is

            sustained at this stage in the litigation.

                    Next, Defendant argues that regardless of the statute oflimitations, Plaintiffs claim for

            fiduciary duty must be dismissed on the basis that Defendant owed no duty to Plaintiff.

            Defendant argues that the manager of BLS Associates is nonparty BLS Manager, and that is who

            owed plaintiff a fiduciary duty, not Defendant. In opposition, Plaintiff argues Defendant owed

            Plaintiff a fiduciary duty not as the named manager, but by way of its control over BLS

            Associates. Defendant further argues Plaintiff is attempting to improperly pierce the corporate

            veil.

                    While Defendant is correct that under Delaware law only managing members or

            controllers owe fiduciary duties by default in LLCs, Defendant incorrectly reasons this

            conclusively proves Defendant owed Plaintiff no duty. (Beach to Bay Real Est. Ctr. LLC v.

            Beach to Bay Realtors Inc., No. CV 10007-VCG, 2017 WL 2928033 [Del. Ch. July 10, 2017]).

             652944/2023 BLS HOLDCO, LLC vs. KUSHNER COMPANIES, LLC ET AL                           Page 8 of 13
             Motion No. 001

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            Here, plaintiff has alleged adequate facts to demonstrate that while Defendant was not the

            manager, Defendant exercised extensive control over the LLC.

                   Moreover, the cases Defendant points to are each distinguishable from the case at bar. In

            Beach, the Court found the plaintiff had failed to adequately plead breach of contract against the

            defendants as plaintiff merely alleged "defendant was a managing member and thus owed

            plaintiff a fiduciary duty." (Beach 2017 WL 2928033). Here, Plaintiff has made a number of

            specific allegations regarding the Defendants control and power over BLS Associates, including

            that Defendant Kushner was in sole control of numerous loan and purchase/sale transactions and

            other business activities, and exercised control over BLS Associates' assets and members'

            capital accounts. In addition, Plaintiff has alleged Defendant Kushner consistently held itself out

            as the entity with control and management responsibilities, sent correspondence to investors on

            their individual letterhead, signed agreements on behalf of borrower LLCs and appeared to

            expressly acknowledge the existence of a fiduciary relationship between Kushner and investors

            in the managed properties.

                   Moreover, in REM, the Court held there was no fiduciary duty owed by defendant

            because it was neither a manager or a controller and the LLC agreement "did not impose any

            additional, non-default fiduciary duties on REM OA." (See REM OA Holdings, LLC v. Northern

            Gold Holdings, LLC, Not Reported in Atl. Rptr. [Del.Ch., 2023]). Here, Defendant has not met

            its burden for the purposes of a motion to dismiss, to conclusively show it was not a controller.

            Again, in Stone, the Court found plaintiffs pleading failed to show defendant owed a fiduciary

            duty as it merely said, "practically exercising board-level control" over the Company. The Court

            found this allegation is conclusory and contradictory to other claims where plaintiff admitted

            having sole control. (Stone & Paper Investors, LLC v. Blanch, Not Reported in Atl. Rptr.

             652944/2023 BLS HOLDCO, LLC vs. KUSHNER COMPANIES, LLC ET AL                        Page 9 of 13
             Motion No. 001

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            [Del.Ch., 2020]). Again, this is not the case here. Plaintiff has made specific non conclusory

            allegations that if found true, demonstrate Defendant's controller capacity.

                      While both parties cite to substantive Delaware law on this issue, the Court notes that the

            outcome is aligned under New York law as well. A fiduciary relationship arises "between two

            persons when one of them is under a duty to act for or to give advice for the benefit of another

            upon matters within the scope of the relation." Put differently, a fiduciary relation exists when

            confidence is reposed on one side and there is resulting superiority and influence on the other"

            Ascertaining the existence of a fiduciary relationship "inevitably requires a fact-specific inquiry."

            (Roni LLC v. Arfa, 18 N.Y.3d 846, 848 [2011] [internal quotation marks and citation omitted]).

            Therefore, under New York law, there is at least a question of fact as to whether there was a

            fiduciary relationship between the parties.

               III.      Second Cause of Action for Unjust Enrichment

                      Next, Defendant asserts Plaintiffs unjust enrichment claim should be dismissed as it is

            duplicative of its breach of fiduciary duty claim. In opposition, Plaintiff contends that unlike like

            its breach of fiduciary duty claim, the basis for its unjust enrichment claim is the Defendant's

            specific overpayments to itself in the course of the deal, where the breach of fiduciary duty claim

            goes beyond this.

                      Under Delaware law, unjust enrichment is the "unjust retention of a benefit to the loss of

            another, or the retention of money or property of another against the fundamental principles of

           justice or equity and good conscience." The elements of unjust enrichment are (i) an enrichment,

            (ii) an impoverishment, (iii) a relation between the enrichment and impoverishment, (iv) the

            absence of justification, and (v) the absence of a remedy provided by law. Courts developed

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             Motion No. 001

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            unjust enrichment as a theory of recovery to remedy the absence of a formal contract. (Stone

            2020 WL 3496694).

                     Here, the Court finds that Plaintiff has alleged sufficient facts to meet the elements of an

            unjust enrichment claim. Plaintiff alleges that during the joint venture between the parties,

            Defendant Kushner, as the party spearheading the investment and coordinating funding for the

            project, unjustly enriched itself with funds that should have been distributed to Plaintiff. While

            some of these allegations form the basis for Plaintiff's breach of fiduciary duty claim, this does

            not prevent Plaintiff from pleading unjust enrichment as an alternative theory of liability per se.

            Thus, based on the allegations in the Complaint and reasonable inferences drawn from them,

            Plaintiff has alleged sufficient facts which would constitute unjust enrichment.

                     Similarly, the elements of an unjust enrichment claim in New York are that (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. (See Mandarin

            Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 182, 944 N.E.2d 1104, 1110 [2010]). For the

            reasons set forth above, Plaintiff has adequately plead a claim for unjust enrichment under New

            York Law. However, as explained previously, not all of Plaintiff's allegations survive the statute

            of limitations threshold. Therefore, Plaintiff's unjust enrichment claim survives only to the extent

            that the allegations occurred within Delaware's three-year statute of limitations, as prescribed

            above.

               IV.      Accounting

                     Next, Defendants assert Plaintiffs accounting must be dismissed as Delaware law does

            not provide a free-standing independent cause of action for an accounting but rather "' an

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             Motion No. 001

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            accounting is an equitable remedy that consists of the adjustment of accounts between parties

            and a rendering of a judgment for the amount ascertained to be due to either as a result."' (See

            Garza v. Citigroup Inc., 192 F. Supp. 3d 508,511 [D. Del. 2018]). Plaintiff concedes that under

            Delaware law, a claim for an accounting is a remedy and not an independent cause of action.

            However, Plaintiff argues that here it has stated one or more predicate claims. Thus, as the court

            has found Plaintiff has adequately plead a cause of action for breach of fiduciary duty and unjust

            enrichment, its claim for accounting is proper.

               V.       Third Cause of Action for Aiding and Abetting Breach of Fiduciary Duty

                    Lastly, Defendants move to dismiss Plaintiffs claim for aiding and abetting breach of

            fiduciary duty against Mr. Morelli. Defendant alleges Plaintiff does not belong as a Defendant in

            this lawsuit as the complaint "makes only passing references to him and does not begin to

            explain how he knowingly aided and abetted any breach of fiduciary duty." Furthermore,

            Defendant contends, the Complaint is devoid of allegations of knowing participation. In

            response, Plaintiff asserts that its allegations that Mr. Morali withheld information and made

            misrepresentations, pushed for the repayment of loans to the detriment of plaintiff, and

            personally assured plaintiff that defendant did not face significant exposure from the putative

            class actions.

                    The elements of a claim for aiding and abetting a breach of fiduciary duty are: ( 1) the

            existence of a fiduciary relationship, (2) a breach of the fiduciary's duty, (3) knowing

            participation in that breach by the defendants, and (4) damages proximately caused by the

            breach. (Stone & Paper Invs., LLC v. Blanch, CA. No. 2018-0394-PAF, 2020 WL 3496694 [Del.

            Ch. June 29, 2020]). Here, as the Court has explained above, Plaintiffs claim for breach of

            fiduciary duty withstands at this stage in the litigation. Thus, the determinative issue here is

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             Motion No. 001

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            whether Plaintiff has adequately plead defendant Morali' s known participation in that breach.

            The Court finds that plaintiff has made such adequate allegations. Granting Plaintiff with all

            favorable inferences, there is sufficient allegations to substantiate a claim that defendant Moralli,

            as a conduit and representative of Defendant Kushner, knowingly made misrepresentations to

            plaintiff which negatively impacted their investment, such as the improper deregulation of the

            multi-family buildings.

                    The foregoing constitutes the Decision and Order of the Court.

                     2/1/2024
                      DATE                                                           LYLE E. FRANK, J.S.C.

                                      ~
             CHECK ONE:                   CASE DISPOSED                     NON-FINAL DISPOSITION

                                          GRANTED         □ DENIED          GRANTED IN PART          □ OTHER
             APPLICATION:                 SETTLE ORDER                      SUBMIT ORDER

             CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN        FIDUCIARY APPOINTMENT    □ REFERENCE

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             Motion No. 001

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