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Rafferty Sand & Gravel, LLC v. Kalvaitis
Citations: 116 A.D.3d 1290; 984 N.Y.S.2d 462
Court: Appellate Division of the Supreme Court of the State of New York; April 17, 2014; New York; State Appellate Court
An appeal was made regarding a Supreme Court order that denied defendants' motion to dismiss an amended complaint filed by a sand and gravel supplier. The plaintiff claimed a partnership with defendant Willi Kalvaitis was established in 2004 to develop a limestone quarry on Kalvaitis' property, but in 2011, after significant investments by the plaintiff, access was denied by the defendant. The complaint sought dissolution of the partnership, an accounting, a constructive trust on the business and property, and recovery in quantum meruit. The defendants' motion to dismiss was denied by the Supreme Court, prompting the appeal. Subsequently, the court granted a motion to reargue and dismissed the claims for dissolution and accounting, rendering that part of the appeal moot. However, the court maintained its decision regarding the constructive trust and quantum meruit claims. The court upheld the denial of the motion to dismiss the constructive trust claim, emphasizing that such a remedy is appropriate when the legal title holder should not retain the beneficial interest due to unjust enrichment. To establish a constructive trust, the plaintiff must demonstrate a fiduciary relationship, a promise, reliance on that promise, and unjust enrichment. The plaintiff's allegations included a fiduciary relationship, promises made by the defendant, reliance on those promises, and the defendant’s unjust enrichment. The court found that these allegations were sufficient to state a cause of action for a constructive trust, interpreting the claims favorably for the plaintiff. A quantum meruit claim necessitates demonstrating that the plaintiff performed services in good faith, the defendant accepted those services, the plaintiff expected compensation, and the reasonable value of the services is provable. The complaint asserts that the plaintiff acted in good faith with the expectation of compensation for contributions to the business, which the defendant accepted. The plaintiff claims damages reflecting the reasonable value of these contributions, including over $200,000 in investments and essential resources for business development. An affidavit from the plaintiff's principal details that substantial processed materials, funded by the plaintiff, remained on the property after the plaintiff was locked out in 2011, and the defendants have benefited from these contributions by selling materials without compensating the plaintiff. The court agreed with the plaintiff's position, rejecting the defendants' argument that the services were primarily for the plaintiff's benefit, thus affirming the complaint's validity for quantum meruit. The appeal regarding the dismissal of the first two causes of action was dismissed as moot, while the dismissal of the third and fourth causes of action was affirmed. The plaintiff subsequently amended the complaint to include Barbara Kalvaitis, a co-owner of the business.