SARAH NETBURN, Magistrate Judge.
The plaintiff Christopher Rouse commenced this action against the defendants Elliot Stevens, Ltd. and Steven Shalom, alleging claims for breach of contract, unjust enrichment and fraud. Both parties now move for judgment on the pleadings on each of the plaintiff's claims.
For the reasons set forth below, the plaintiff's motion is DENIED in its entirety, and the defendant's motion is GRANTED in part on the breach of contract and unjust enrichment claims.
The following facts are taken from the parties' pleadings, as well as from documents that were incorporated by reference into the plaintiff's complaint and included as exhibits with the parties' Joint Proposed Pre-Trial Order ("JPTO").
Defendant Elliot Stevens owns and operates a store in the lobby of the Waldorf Astoria Hotel (the "Waldorf Astoria") in New York, New York. (Compl. ¶ 7.) In July 2007, the plaintiff Christopher Rouse, a United Kingdom resident, vacationed in New York and spent approximately a week as a guest at the Waldorf Astoria. (Compl. ¶¶ 2, 6.) On July 15, 2007, the plaintiff purchased ten separate statues (the "Statues") for a purchase price of $105,000 from defendant Elliot Stevens, Ltd. ("Elliot Stevens"). (JPTO Ex. 5.) The phrases "Specialists in European and Oriental Art" and "Licensed Appraisers" were printed at the top of the bill of sale, and the phrase "ALL SALES ARE FINAL" was printed at the bottom. (
On August 1, 2007, Steven Shalom, an employee of Elliot Stevens, appraised each of the Statues. (JPTO Ex. 6.) In the appraisal document, Mr. Shalom represented that he was a member of the "Mid-Am/The Antique Appraisers Association and a qualified appraiser of the articles listed below." (
On August 8, 2014, the plaintiff arranged for the shipment of the Statues to his home in the United Kingdom. He paid £3615.24 to cover the cost of shipping. (JPTO Ex. 7.)
According to the plaintiff, when he first viewed the Statues at Elliot Steven's store, he was told by an Elliot Steven's employee that they were "genuine works" by artists Demeter H. Chiparus, Paul Philippe and Michael Godard. (Compl. ¶ 11.) The plaintiff was also told that Chiparus had been a long-time resident of the Waldorf Astoria and that upon his death, Elliot Stevens had acquired a number of his original artworks. (Compl. ¶ 12.) The plaintiff allegedly was offered the Statues at a "significant discount," due to the impending retirement of the store's owners. (Compl. ¶ 13.) According to the plaintiff, the owners did not retire, nor were they planning to retire soon at the time that this statement was made.
The plaintiff alleged that he agreed to purchase the Statues for $105,000 in reliance on Elliot Stevens's representation that the Statues were genuine and were being offered at a significant discount. He contends that when the Statues arrived at his residence in the United Kingdom, they did not appear to be the same as those he viewed at Elliot Stevens's store in New York. An appraiser hired by the plaintiff valued the Statues at "less than $10,000" and concluded that they were "cheap copies with no artistic value." (Compl. ¶ 48.) The plaintiff sought to return the Statues to Elliot Stevens in exchange for a full refund, but the parties were unable to reach an agreement.
The plaintiff alleges that the Elliot Stevens employee "knew the Statues were worth far less than the invoice price at the time [the] representation was made." (Compl. ¶ 21.) He contends that at the time of the sale, Elliot Stevens also knew that the Statues were "unauthorized copies of the original works," and "worth no more than the value of the materials from which they were made." (Compl. ¶¶ 39, 40.)
The plaintiff further alleges that the Mid-Am Antique Appraisers Association, of which Mr. Shalom is a member, has been defunct since 1986. He contends that in August 2007, Mr. Shalom had no valid appraiser license from any existing appraisal organization.
On March 4, 2013, the plaintiff filed a complaint against Elliot Stevens and Steven Shalom (the "defendants"), alleging fraud, breach of contract and unjust enrichment. The parties consented to magistrate judge jurisdiction on September 29, 2015. On February 25, 2016, the parties submitted their Joint Proposed Findings of Fact and Conclusions of Law in anticipation of trial. Upon Court order, the plaintiff filed a motion for judgment on the pleadings on May 5, 2016. The defendant filed a cross-motion and opposition on May 17, 2016, and the plaintiff filed an opposition and reply on May 23, 2016.
Judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) "is appropriate where material facts are undisputed and where a judgment on the merits is possible merely by considering the contents of the pleadings."
In considering a Rule 12(c) motion for judgment on the pleadings, the court applies the same standards used for the determination of a Rule 12(b)(6) motion to dismiss.
The defendants argue that the plaintiff's breach of contract and unjust enrichment claims are both time barred and should be dismissed. A federal court sitting in diversity must apply the forum state's law to determine the applicable statute of limitations for each claim.
In moving for judgment on the pleadings based on a statute of limitations defense, the defendant bears the initial burden of demonstrating that the statute of limitations has expired.
Both parties move for judgment on the pleadings on plaintiff's breach of contract claim. The plaintiff argues that the undisputed facts establish defendants' liability for breach of contract; whereas the defendants argue, among other things, that the breach of contract claim is time barred under the four-year statute of limitations that governs contracts for the sale of goods under the New York Uniform Commercial Code (N.Y. UCC). In this regard, the defendants contend that the plaintiff's claim accrued in 2007, when he received delivery of the Statues. The plaintiff rejects this accrual date, arguing that the claim did not accrue until 2011, when the parties' negotiations over the possible return of the Statues broke down. The complaint was not filed until March 4, 2013.
Claims arising under the UCC for breach of contract are subject to a four-year statute of limitations.
In opposing defendants' motion, the plaintiff argues that his claim did not accrue until 2011—four years after delivery—when the parties' settlement negotiations broke down and the defendants definitively took the position that they would not accept the plaintiff's return of the Statues in exchange for a refund. In this regard, the plaintiff seeks to analogize the facts of this case to the accrual of a claim for anticipatory repudiation. He relies on
A claim for anticipatory repudiation is "separate and distinct from a cause of action sounding in breach of contract,"
Here, both parties fully performed their duties under the contract: the plaintiff paid the defendant $105,000 as consideration for the Statues, and the defendant tendered delivery of the Statues to the plaintiff. The bill of sale made plain that the sale was final; no returns were permissible. As such, there was no future performance for the defendants to repudiate and, concomitantly, no basis for plaintiff to await future performance.
Furthermore, the plaintiff's rejection of non-conforming goods did not toll the fouryear statute of limitations.
The plaintiff's claim for breach of contract is therefore time barred, and judgment in favor of defendants on plaintiff's breach of contract claim is granted.
The plaintiff seeks judgement on the pleadings on his unjust enrichment claim based on the defendants' responses (or non-objections) to the Requests for Admissions. The defendants seek judgment on the pleadings on the ground that this equitable claim is precluded by the contract between the parties and is time barred.
Both parties mistakenly assert that either a three- or six-year statute of limitations would apply to plaintiff's unjust enrichment claim. But where an unjust enrichment and breach of contract claims are based upon the same facts and pled in the alternative, the same statute of limitation applies to both.
The plaintiff's unjust enrichment claim is premised on the same facts as his breach of contract claim. He alleges that the defendant represented that the Statues were genuine, the plaintiff paid defendant $105,000 for the Statues, and the Statues were later appraised to be worth between $0 and $500 each. (
Both parties move for judgment on the pleadings on plaintiff's fraud claims. The plaintiff argues that there are undisputed facts that establish that the defendants are liable for fraud. The defendants argue that the plaintiff's fraud claims are duplicative of the breach of contract claim and therefore are improper as separate and distinct causes of action. Separately, the defendants argue that the facts do not support a finding of fraud.
Under New York law, a claim for fraud is barred if it is merely duplicative of a plaintiff's breach of contract claim.
Viewing all facts in the light most favorable to the non-moving party, the plaintiff has pleaded a fraudulent inducement claim that is separate and distinct from the plaintiff's breach of contract claim. Accordingly, defendants are not entitled to judgment on the grounds that the pleadings fail to allege a non-collateral fraud claim.
The plaintiff alleges that before the parties entered into a contract for the sale of the Statues, the defendants showed him ten statues, which were represented to be "genuine works" by the artists Demeter H. Chiparus, Paul Philippe, and Michael Godard. (Compl. ¶ 11.) The defendants' statements regarding the authenticity of the Statues induced the plaintiff to purchase them for $105,000, a price that the defendants allegedly told him was "well below market." (Compl. ¶ 19.) These representations were statements about present facts, rather than statements about the defendants' future intent to perform under the contract. The alleged statements therefore constituted "independent false representations . . . before there ever was a contract between the parties, which led [the plaintiff] to enter into it."
The plaintiff argues that he is entitled for judgment on the pleading on his fraud claims. In order to state a cause of action for fraud, a plaintiff must allege "(1) a material misrepresentation or omission of fact (2) made by defendant with knowledge of its falsity (3) and intent to defraud; (4) reasonable reliance on the part of the plaintiff; and (5) resulting damage to the plaintiff."
The plaintiff contends that the defendants represented that the Statues were "genuine works" by Chiparus, Philippe and Godard. (Compl. ¶ 11.) The plaintiff further alleges that he was told that the defendants were offering him a "significant discount" on the Statues, purportedly because the owners of the shop were planning to retire soon. (Compl. ¶ 13.) The plaintiff argues that he relied on these false representations and purchased the Statues for $105,000. (Compl. ¶ 15.) He asserts that at the time these assertions were made, the defendants "knew the Statues were worth far less than the invoice price." (Compl. ¶ 21.) After the plaintiff had agreed to purchase and paid for the Statues, the defendant sent him appraisals for each statue, in which Mr. Shalom described the Statues as "genuine." (Compl. ¶ 26.) The plaintiff alleges that these descriptions were "deliberate fraudulent misrepresentations," and that "[n]ot withstanding the valuation of the Statues in the Elliot Stevens Appraisals of between $5,000 and $17,000 per Statue, none of the Statues is worth more than $500, such value being entirely related to the materials from which each Statue is made." (Compl. ¶¶ 28-29.) The plaintiff alleges that as a result of his reliance on the defendants' representations, he incurred $105,000 plus £3615.24 in damages.
In opposition to the plaintiff's motion, defendants argue that defendants "did not knowingly present any false, fraudulent or misleading information to Plaintiff concerning the statues." (Defs.' Opp'n Br. 9.) In their answer, the defendants deny that the plaintiff was told that the Statues were "genuine" and that the store was offering him a discount on the Statues due to the owner's plans to retire. (Answer ¶¶ 11, 13.) They also deny the plaintiff's allegation that the Statues are worth no more than $500 each. (Answer ¶ 29.)
Construing the facts in the light most favorable to the nonmoving party, there are material facts in dispute which makes judgment on the pleadings in the plaintiff's favor improper. Accordingly, the plaintiff's motion for a judgment on the pleadings on his fraud claims is denied.
The defendants' motion for judgment on the pleadings with respect to the plaintiff's breach of contract and unjust enrichment claims is GRANTED. Both parties' motions for judgment on the pleadings with respect to the plaintiff's fraud claims are DENIED.
The parties shall appear at the Final Pre-Trial Conference on June 30, 2016, at 10:00 in Courtroom 219 at the Thurgood Marshall Courthouse, 40 Foley Square, New York, NY. The trial on the plaintiff's fraud claim will commence on Thursday, July 7, 2016.
The Clerk of the Court is respectfully directed to terminate the motions at ECF 71 and 74.