Schlamowitz v. Tirado
MEMORANDUM AND ORDER: The Court finds in favor of plaintiff Minerva Schlamowitz. The Clerk is directed to enter judgment in favor of Minerva Schlamowitz in the amount of $89,249.48 along with any post-judgment interest that accrues from the date that judgment is entered. So Ordered by Magistrate Judge Cheryl L. Pollak on 8/22/2014. (Breslow, Sarah)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-against12 CV 504 (CLP)
On February 2, 2012, Minerva Schlamowitz ("plaintiff') commenced this suit against her
sister Raquel Tirado ("defendant"), alleging that defendant owed her repayment on a loan in the
amount of $180,000, 1 no part of which has been repaid to plaintiff despite demands for
repayment. (Compl. 2 ~ 4).
On March 14, 2014, the parties consented to have the case tried before the undersigned,
and a bench trial was held on May 13, 2014. Having considered the testimony, evidence, and
arguments presented by the parties at trial, the Court finds that defendant owes plaintiff a total of
$89,249.48 for the reasons set forth below.
During the May 13, 2014 trial, it became clear that both parties agreed that Schlamowitz
had lent her sister Tirado monies over a five year period, beginning in 2007. It is also undisputed
Although plaintiff alleged in her Complaint that the loan was in the amount of
$180,000, at trial, plaintiff claimed that defendant actually owes her $220,400. (Transcript of the
Trial of May 13, 2014 ("Tr.") at 6, 15).
Citations to "Compl." refer to plaintiff's Complaint, filed February 2, 2012.
that the terms of the agreement were never reduced to writing. Thus, the key issues for trial
were: I) how much money had Schlamowitz lent to Tirado; 2) how much, if anything, had Tirado
repaid; and 3) whether the parties had reached an agreement as to interest.
During the trial, the parties stipulated that there were transfers in the amount of $142,500
loaned from plaintiff to defendant. (Tr. at 5). It is plaintiff's position that an additional $77,900
was loaned to the defendant, for a total amount owed of$220,400. (lih at 5-6; Joint Rpt'). This
additional $77,900 amount allegedly consists of$60,000 in undocumented cash loans, a
documented $10,000 cash withdrawal by plaintiff in Massachusetts that she claims was loaned to
Tirado, and $7,900 from two additional documented cash withdrawals plaintiff made in New
York that were also allegedly loaned to defendant. (Joint Rpt; Tr. at 6, 12-13; Ex. A4 at 429; Ex.
B at 405; Ex. C at 290).
Defendant denies receiving the $77,900 in additional cash loans. (Tr. at 22). Instead,
defendant contends that not only did she never receive these amounts, but in fact, she repaid a
total of$76,902 to plaintiff. (Joint Rpt; Tr. at 22-23). Tirado alleges that this $76,902 repayment
is comprised of$69,920 made through deposits to plaintiff's accounts, evidenced by defendant's
deposit slips, and a $7,000 undocumented cash repayment. (lih; Ex. J). Plaintiff denies receipt
of the undocumented $7,000 in cash, and claims that the $69,920 in deposits to plaintiff's
accounts was in fact interest owed on the loans, and not repayment of principal. (Joint Rpt; Tr. at
Citations to "Joint Rpt" refer to the Joint Report on Proposed Damages Calculations,
filed by the parties on June 17, 2014.
Citations to "Ex." refer to the defendant's exhibits. Exhibits A, B, and C contain the
Exhibits of the Proposed Pretrial Order submitted by defendant, filed on May I, 2014. Citations
to Exhibits H, I, J, and K refer to the Defendant's Trial Exhibits.
Set forth in the table below is a summary of the parties' respective positions. Plaintiff
believes she is due $220,400 (the stipulated amount of$142,500, plus a disputed $77,900 in
additional loans), while defendant believes plaintiff is only due $65,580 (the stipulated amount of
$142,500, minus the disputed repayment of$76,902). (Joint Rpt). Plaintiff and defendant were
the only witnesses who testified at trial.
Amount Owed (Plaintiff)
Amount Owed (Defendant)
+ $142,500 loaned through transfers
+ $142,500 loaned through transfers
+ $60,000 undocumented cash loans from home -$69,920 repayments of principal from
transfers to plaintiff's account (evidenced
by deposit slips)
+ $10,000 cash loan (withdrawal in
-$7,000 cash repayment
+ $5,500 cash loan (withdrawal in New York)
+ $2,400 cash loan (withdrawal in New York)
Testimony of Minerva Schlamowitz
At trial, plaintiff Minerva Schlamowitz testified that she loaned her sister, Raquel Tirado
money for defendant's business expenses. (Tr. at 10). Schlamowitz testified that Tirado
promised to withdraw money from a certificate of deposit to pay back the loan in full once the
plaintiff needed the money, but, according to plaintiff, her sister did not repay any of the loan
Although plaintiff alleged at trial that there was an interest agreement of $2,500 per
month (Tr. at 19-20), she has not specifically included a calculation of that amount in her request,
limiting her claim to repayment of alleged principal totaling $220,400.
when a request for repayment was eventually made. Q4,. at 14-15). Schlamowitz stated that
defendant did periodically pay her interest on the loan and that defendant's deposit slips,
submitted to the Court as Exhibit J, are evidence of these periodic interest payments. (M, at 10,
14; Ex. J). Schlamowitz claimed that she and her sister had an interest agreement, whereby
defendant would pay $2,500 a month in interest. (Tr. at 19-20). However, Schlamowitz testified
that defendant would sometimes pay less than the agreed upon amount, or no interest at all
depending on how much money defendant could repay each month. (Id.)
Since the parties stipulated that Schlamowitz lent Tirado at least $142,500, the testimony
at trial focused on the additional $77,900 that plaintiff claimed she had loaned to defendant and
the $76,920 defendant claimed to have repaid plaintiff. During direct examination, plaintiff's
counsel pointed to plaintiff's bank records reflecting three cash withdrawals plaintiff made on
July 17,2008, January 28,2010, and June 3, 2010, totaling $17,900. (M, at 11-13).
Schlamowitz testified that these three withdrawals were all cash loans made to the defendant.
Q4,.) According to plaintiff, the January 28,2010 withdrawal of$10,000 was made from
plaintiff's account in Massachusetts, where defendant resides. Q4,. at 12). The July 2008 and
June 2010 withdrawals were made in New York, where plaintiff resides. (Id.) On crossexamination, Schlamowitz claimed that the January 2010 Massachusetts withdrawal was made
when plaintiff visited the defendant in Boston for one week and the $10,000 in cash was given to
Tirado as a loan. Q4,. at 18-19). Schlamowitz further claimed that the two New York cash
withdrawals from July 2008 and June 2010 represent sums loaned to defendant when defendant
came to New York to visit. Q4,. at 17-18).
Schlamowitz also testified that she loaned defendant an additional $60,000 dollars in cash
that is not reflected as a withdrawal in the bank statements because she saved it at home and not
at the bank. (Id. at 13). Schlamowitz claimed that the cash that she saved at home came from
her husband's pediatric practice, where she works as an assistant and handles the money. (!4,)
On cross-examination, she testified that the $60,000 in saved cash from her husband's business
was loaned to defendant periodically over five years.
iliL. at 16, 17).
Schlamowitz conceded that, other than her own sworn testimony and the bank statements
introduced into evidence, she has no further evidence to prove that any of the cash payments in
dispute were made to the defendant.
iliL. at 19).
Furthermore, Schlamowitz testified that she has
no other evidence to prove that the defendant's $69,920 in deposits to her account were in fact
interest payments. (!4,) In total, Schlamowitz claims that she loaned $220,400 to the defendant,
none of which was repaid.
iliL. at 14-15; Joint Rpt).
Testimony ofRaquel Tirado
The defendant, Raquel Tirado, claimed that plaintiff only loaned her $142,500. (Tr. at
51). Tirado categorically denied receiving any of the cash payments that plaintiff claimed were
iliL. at 22).
Tirado testified that the only time cash was exchanged in this financial
arrangement between plaintiff and defendant was when Tirado made a $7,000 cash repayment to
plaintiff witnessed by their mother, Zulena Calcano, and defendant's assistant in defendant's
home in Massachusetts.
iliL. at 23, 26).
However, Tirado did not call any of these witnesses to
testify about this alleged cash repayment and has no records showing that such a cash repayment
was made. (Id.)
Tirado also denied the existence of any agreement as to interest, stating repeatedly that
"we never talked about interest." (llh at 23, 41, 43, 44, 48). Instead, she testified that the
$69,920 in deposits she made to plaintiff's account• were repayments of principal on the Joan,
which she made approximately once a month as part of a cycle of loans and repayment agreed
upon with her sister. (Id. at 42-44). Tirado claimed that sometimes she borrowed money, repaid
it, and borrowed more all in quick succession because sudden, pressing business expenses like
"gas" and "insurance" for her transportation company would arise and require her to ask her
sister for more money immediately. (M, at 44). When questioned about scribbled out notes on
the deposit slips that she provided as evidence of the repayments, Tirado stated that she did not
remember what the notes had said, but that they could have been notes to herself, like phone
numbers. (M, at 48). She testified that she did not tamper with these deposit slips, and that ''they
were already like this" when she searched and found them for use in this lawsuit. ilih)
Additionally, Tirado testified that she was in fact mistaken when she testified at her
deposition that she had not made deposits to the joint account she shared with the plaintiff. (M,
at 30-33). She did in fact make deposits to the joint account, and both sides stipulate to that.
(Id.) Tirado was also questioned about her deposition testimony where she testified that she
suspected someone had broken into her home and stolen her bank records. (M, at 35). When
questioned at trial, Tirado confirmed that she had no proof that a break-in had occurred, only
suspicions, but she conceded that Schlamowitz's counsel had no involvement in such a crime.
(M, at 35-38).
The only documents entered into evidence at trial consist of various Bank of America
Although the sisters shared a joint account at Bank of America (account number 9988),
these deposits were to plaintiff's account bearing account number 6805.
account statements held in the name of either plaintiff or defendant, defendant's deposit slips,
and an accounting report from Shalik, Morris & Company LLP, 7 analyzing the bank statements.
The parties stipulate to the accuracy of the exhibits.
Choice of Law
This case is brought pursuant to 28 U.S.C. § 1332 and based on the diversity of the
parties. In diversity actions, federal courts follow the choice-of-law rules of the forum state to
determine the controlling substantive law. Pension Comm. of the Univ. of Montreal Pension
Plan v. Bane of Am. Sec.. LLC, 446 F. Supp. 2d 163, 191 (S.D.N.Y. 2006) (citing Erie R.R. Co.
v. Tompkins, 304 U.S. 64 (1938)). Since the action was brought in the Eastern District of New
York, New York choice oflaw principles govern. Crescent Oil & Shipping Servs .. Ltd. v. Phibro
Energy. Inc., 929 F.2d 49,52 (2d Cir. 1991).
In contract disputes, New York courts apply the law of the jurisdiction having the greatest
interest in the litigation. Id. The factors generally considered by courts in determining which
state has the greatest interest include: the place of contracting, negotiation and performance; the
location of the subject matter of the contract; and the domicile of the contracting parties.
In the accounting report, submitted as plaintiff's Exhibit G, plaintiff's accountants
concluded that they could verifY $130,300 in transfers from Schlamowitz to Tirado. However,
the parties stipulated to an agreed upon amount of$142,500 in transfers from Schlamowitz to
Tirado. From the Court's review of the accounting report, it is not evident where or when the
remaining $12,200 loan was made. However, as the parties stipulated at trial to $142,500 as the
amount owed to Schlamowitz (see Joint Rpt., Tr. at 5), the Court credits their accounting.
Ackerley Media Gr.p.• Inc. v. Sham Elecs. Corn., 170 F. Supp. 2d 445,450 (S.D.N.Y. 2001); see
also Pegasus Aviation IV. Inc. v. Aerolineas Austral Chile, S.A., No. 08 CV 11371,2012 WL
967301, at *5 (S.D.N.Y. Mar. 20, 2012) (considering each of the factors in a choice oflaw
In this action, neither party has addressed the question of whether New York or
Massachusetts law applies. Under New York law, the law of the forum state in this case, "a party
wishing to apply the law of a foreign state [must] show how that law differs from the forum
state's law. Failure to do so results in the application of New York law." Havwin Textile Prods ..
Inc. v. Int'l Fin. Inv. & Commerce Bank Ltd., 152 F. Supp. 2d 409,413 (S.D.N.Y. 2001).
Neither party in this case has indicated that she wishes to apply Massachusetts law, and thus New
York law applies. Moreover, while the plaintiff resides in Massachusetts, and the location of the
formation and negotiation of the original oral loan agreement in this case is unclear, the vast
majority of performance on the contract occurred in New York. Plaintiff loaned the majority of
the money for which she now seeks repayment in New York, including the $142,500 stipulated
to by both parties. (Ex. H; Tr. at 5). While plaintiff claims that she made a $10,000 loan to
defendant in Massachusetts, this amount, plus the alleged $69,920 in deposits and the $7,000
cash repayment that defendant claims took place in Massachusetts, are less than the amount
loaned in New York. (Tr. at 6, 7). Thus, although the parties live in different states (New York
and Massachusetts) and there were loans and repayments made in each of those states, the Court
finds that the majority of performance on the contract took place in New York.
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