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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
Garry, J. addresses an appeal concerning a Supreme Court order dated September 18, 2012, which denied defendants' motion to dismiss an amended complaint. The plaintiff, a sand and gravel supplier, alleges a partnership with defendant Willi Kalvaitis formed in 2004 to develop a limestone quarry in Chazy, Clinton County. The plaintiff claims that after significant investments in the quarry, the defendant locked the premises, denying access. The complaint seeks partnership dissolution, an accounting, a constructive trust on the quarry, and quantum meruit recovery. Defendants sought to dismiss the amended complaint on multiple grounds, but the Supreme Court denied this motion. During the pending appeal, defendants requested to reargue, leading to a November 2013 ruling that dismissed the claims for partnership dissolution and accounting, rendering that portion of the appeal moot. However, the appeal regarding the constructive trust and quantum meruit claims remained active. The Supreme Court upheld its original ruling on the constructive trust claim, confirming that such equitable relief can be granted when the legal title holder may not justifiably retain the beneficial interest. To succeed, the plaintiff must show a fiduciary relationship, a promise, reliance on that promise, and unjust enrichment. The complaint asserts the existence of a fiduciary relationship, promises made by the defendant, the plaintiff's reliance on these promises, and the defendant's unjust enrichment, all of which, if taken as true, support the claim for a constructive trust. The court found that the amended complaint sufficiently states a cause of action for imposition of a constructive trust based on these allegations. A quantum meruit cause of action requires proof of the plaintiff's good faith performance of services, acceptance of those services by the defendant, an expectation of compensation, and evidence of the services' reasonable value. The complaint asserts that the plaintiff provided valuable contributions to the business with the expectation of compensation, that the defendant accepted these contributions, and that the plaintiff suffered damages reflecting their reasonable value. The plaintiff's principal submitted an affidavit detailing over $200,000 in contributions along with necessary knowledge, labor, and resources for business development. It was also noted that processed materials paid for by the plaintiff remained on the property after the plaintiff was locked out in 2011, and the defendants continued to profit from selling these materials without compensating the plaintiff. Despite the defendants' argument that the plaintiff's contributions primarily benefited the plaintiff, the court upheld that the complaint adequately states a quantum meruit claim. The court dismissed the appeal concerning the denial of the motion to dismiss the first and second causes of action as moot and affirmed the denial of the motion to dismiss the third and fourth causes of action. Additionally, the plaintiff amended the complaint to include Barbara Kalvaitis, the co-owner of the business and the defendant's wife.