Brenner et al v. Brenner

Filing 23

ORDER granting 7 Motion to Dismiss. For the reasons set forth in the attached Memorandum & Order, defendant's motion to dismiss is granted. Plaintiffs may submit a pre-motion conference letter, within thirty days of the date of this Order, if they wish to request leave to move to amend the Complaint. Ordered by Senior Judge Denis R. Hurley on 9/22/2011. (Monaco, Laura)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-----------------------------------------------------X
WILLIAM BRENNER, JACALYN
BRENNER
Plaintiffs,
-against-

MEMORANDUM & ORDER
CV 10-4857 (DRH) (AKT)

SIMON BRENNER
Defendant.
-----------------------------------------------------X
APPEARANCES:
Robinson & Cole LLP
Attorneys for Plaintiffs
1055 Washington Boulevard
Stamford, Connecticut 06901
By:
Brian James Wheelin, Esq.
885 Third Avenue, 28th Floor
New York, New York 10022
By:
Melissa Faith Savage Shiffman, Esq.
Salamon, Gruber, Blaymore & Strenger, P.C.
Attorneys for Defendant
97 Powerhouse Road
Suite 102
Roslyn Heights, New York 11577
By:
Sanford Strenger, Esq.
HURLEY, Senior District Judge:
Plaintiffs William Brenner (“William”) and Jacalyn Brenner (“Jacalyn”) (collectively,
“plaintiffs”) filed the present action against Simon Brenner (“Simon” or “defendant”) seeking to
recover damages stemming from defendant’s alleged breach of contract. Presently before the
Court is defendant’s motion to dismiss the Complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6). For the reasons stated below, defendant’s motion is granted.

BACKGROUND
The following facts are taken from the Complaint, including the exhibits attached
thereto,1 and are presumed true for purposes of the instant motion.
William and Jacalyn are married and currently reside in Hackensack, New Jersey. Simon,
who currently resides in Roslyn, New York, is William’s uncle. Dean Brenner (“Dean”) is
Simon’s son and William’s cousin.
From the late 1970s until late 1997, William, Simon, and Dean, were part owners of
Delta Trading Corporation (“Delta”), a corporation located at 220 West 30th Street, New York,
New York 10001. By approximately November 1997, Simon no longer possessed an ownership
interest in Delta. As of the beginning of 1998, Dean owned 72.5% of Delta and William owned
the remaining 27.5%. At all relevant times, although Simon no longer had an ownership interest
in Delta, he “remained active in the business of Delta and served as an officer of Delta.” (Compl.
¶ 6.)
In or around December 2001, the U.S. Small Business Administration (“SBA”) made a
loan, No. 50313140-00 (“SBA Loan”), to Delta. The SBA Loan was secured by a mortgage on
plaintiffs’ home in Old Bethpage, New York (“Old Bethpage Home”). William and Jacalyn “did
not want to pledge their home to secure the SBA Loan,” but were “induce[d] . . . to provide such

1

The Court may properly rely on material attached to the Complaint when deciding the
instant motion. See DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010).
“Pleadings,” for purposes of a motion to dismiss under Rule 12(b)(6) “include not just the four
corners of the complaint, but also any written instrument attached to it as an exhibit or any
statements or documents incorporated by reference.” DeLuca v. AccessIT Grp., Inc., 695 F. Supp.
2d 54, 59 (S.D.N.Y. 2010) (quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir.
2002)) (internal quotation marks omitted).
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security for the SBA Loan” when Simon “personally assured them that he would guaranty the
SBA Loan and pay off the SBA Loan if need be.” (Id. ¶ 9.)
Plaintiffs allege that in a letter addressed to William, dated June 9, 2003, (the “Letter”),
Simon “agreed in writing to indemnify and hold Plaintiffs harmless with respect to the SBA Loan
[ ].” (Compl. ¶ 10.) The Letter stated as follows:
I am writing to confirm our verbal discussion in which I told you that
I would ensure that there would be no foreclosure on the second
mortgage that you gave to the United States Small Business
Administration in connection with a loan to Delta Trading Corp.
(Number EIDL50313140-00). In this connection, in the event Delta
Trading Corp. does not pay its obligation and there is an attempt on
the part of the United States Small Business Administration to
enforce its mortgage, then I will indemnify and hold you harmless
from any possible action, including but not limited to paying the
balance if that becomes necessary.
(Id., Ex. A.)
According to plaintiffs, “[a]t various times both prior to and subsequent to the execution
of [the Letter],” Simon “assured William [ ] and Jacalyn [ ] that he would bear full responsibility
for the SBA Loan and would indemnify and hold William and Jacalyn harmless in the event of
any action on the part of the SBA to seek repayment through the second mortgage on the Old
Bethpage Home.” (Compl.

¶ 11.)

In or around mid-2004, Delta, heavily indebted and facing lawsuits, ceased operations.
Thereafter, a new company, DTC Trading LLC (“DTC”), was formed. While the Complaint does
not make clear who owned DTC, plaintiffs allege that William did not acquire an ownership
interest. He did, however, became an employee at DTC and worked there until 2009. “DTC

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initially operated at the same address as Delta” and its “business was similar to that of Delta.”
(Id. ¶ 7.)
Plaintiffs recently sold the Old Bethpage Home, and the SBA Loan was paid off in full
from the proceeds of the sale. (Id. ¶ 12.) Plaintiffs allege that they “acted in good faith and in
reasonable reliance on [the Letter] and the repeated assurances of Simon Brenner that he would
indemnify and hold Plaintiffs harmless.” (Id.) Upon the sale of the Old Bethpage Home,
plaintiffs paid the SBA a total of $124,544.12 in full satisfaction of the SBA Loan (the “Payoff”).
(Id. ¶ 13 & Ex B.)
On or about July 22, 2010, plaintiffs demanded in writing that Simon indemnify them in
the amount of $124,544.12. (Id. ¶ 14 & Ex. C.) Simon refused to indemnify and reimburse
plaintiffs.
Plaintiffs filed the instant action on October 22, 2010. The Complaint contains four
causes of action: Count I seeks damages in the amount of $124,544.12 for defendant’s alleged
breach of contract, while Counts II, III and IV seek recovery under the quasi-contract theories of
unjust enrichment, promissory estoppel and equitable estoppel, respectively.
DISCUSSION
I.

Motion to Dismiss Legal Standard
Federal Rule of Civil Procedure 8(a)(2) provides that a pleading shall contain “a short and

plain statement of the claim showing that the pleader is entitled to relief.” The Supreme Court
has recently clarified the pleading standard applicable in evaluating a motion to dismiss under
Rule 12(b)(6).

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First, in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), the Court disavowed the well-known
statement in Conley v. Gibson, 355 U.S. 41, 45-46 (1957) that “a complaint should not be
dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove
no set of facts in support of his claim which would entitle him to relief.” See Twombly, 550 U.S.
at 561 (quoting Conley, 355 U.S. at 45-46). Instead, to survive a motion to dismiss under
Twombly, a plaintiff must allege “enough facts to state a claim to relief that is plausible on its
face.” Id. at 570.
While a complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, a plaintiff’s
obligation to provide the grounds of his entitlement to relief
requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.
Factual allegations must be enough to raise a right to relief
above the speculative level, on the assumption that all the
allegations in the complaint are true (even if doubtful in fact).
Id. at 555 (citations and internal quotation marks omitted).
More recently, in Ashcroft v. Iqbal, -- U.S. --, 129 S. Ct. 1937 (2009), the Supreme Court
provided further guidance, setting forth a two-pronged approach for courts deciding a motion to
dismiss. First, a court should “begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.” Iqbal, 129 S. Ct. at 1950. “While legal
conclusions can provide the framework of a complaint, they must be supported by factual
assumptions.” Id. Thus, “[t]hreadbare recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.” Id. at 1949 (citing Twombly, 550 U.S. at 555).

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Second, “[w]hen there are well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. at
1950. The Court defined plausibility as follows:
A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. The plausibility standard is not akin to a “probability
requirement,” but it asks for more than a sheer possibility that
a defendant has acted unlawfully. Where a complaint pleads
facts that are “merely consistent with” a defendant’s liability,
it “stops short of the line between possibility and plausibility
of ‘entitlement to relief.’”
Id. at 1949 (quoting Twombly, 550 U.S. at 556-57) (internal citations omitted); see also Ortiz v.
City of New York, 755 F. Supp. 2d 399, 401 (E.D.N.Y. 2010) (“[A] complaint must contain
factual allegations to support the legal conclusions and the factual allegations must plausibly give
rise to an entitlement of relief.”) (internal quotation marks omitted).
II.

Defendant’s Motion to Dismiss Plaintiffs’ Breach of Contract Claim is Granted
A.

The Parties’ Contentions

The Complaint identifies the June 9, 2003 Letter as an “Agreement.” (Compl. ¶ 10.) In
Count I of the Complaint, plaintiffs allege that Simon “breached the Agreement with Plaintiffs by
failing to pay Plaintiffs the Payoff amount of $124,544.12 upon due demand.” (Id. ¶ 16.) In
support of his motion to dismiss Count I, defendant argues that the text of the Letter is
unambiguous on its face and does not support plaintiffs’ allegation that Simon agreed to “blanket
indemnify” them with respect to the SBA Loan. (Def.’s Mem. at 7.) 2 According to defendant,

2

Defendant assumes arguendo that the Letter was “supported by valid consideration” and was
“intended to cover both Jacalyn and William Brenner,” but “does not concede” either of these
points. (See Def.’s Mem. at 6-7 & n.1.)
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“[no]where in the four corners of the June 9, 2003 letter is there the blanket indemnity claimed
by Plaintiffs to exist in that document.” (Id.) To the contrary, defendant asserts that pursuant to
the “unambiguous wording” of the Letter, “no obligation would arise until the SBA commenced
a foreclosure, or otherwise sought enforcement of the loan based upon nonpayment of the SBA
Loan.” (Id. at 9.) Defendant contends that plaintiffs “do[] not plead that the conditions cited in
the June 9, 2003 letter arose, i.e., that the SBA had commenced a foreclosure or in any way
sought to enforce its mortgage.” (Id. at 8.) Rather, according to defendant, the Complaint avers
that “the loan was current and that timely monthly payments were made each month . . . until [the
Loan’s] voluntary pay off by Jacalyn in June of 2010.” (Id.)
Under New York law, “[t]o recover for a breach of contract, Plaintiff must establish: (1)
the existence of an agreement; (2) the plaintiff’s adequate performance of that agreement; (3) a
breach by the defendant; and (4) damages.” Friedman v. Schwartz, 2010 WL 3937304, at *2
(E.D.N.Y. Sept. 30, 2010) (citing Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co.
of N.Y., 375 F.3d 168, 177 (2d Cir. 2004)). While defendant focuses on the “breach” element of
plaintiffs’ first cause of action, plaintiffs dispute defendant’s characterization of what the alleged
agreement was. Plaintiffs assert that, despite defining the Letter as the “Agreement” that was
breached, “[t]he Complaint does not allege that the June 9, 2003 Letter is a fully integrated
agreement,” but that it was simply “an acknowledgment of Simon Brenner’s multiple oral
promises to bear full responsibility for the Loan.” (Pls.’ Opp’n at 7.) Plaintiffs further assert that
Simon’s alleged “oral promises were not conditioned upon the happening of a foreclosure
proceeding.” (Id.)

7

Defendant counters that plaintiffs are improperly attempting to “expand their pleading”
by claiming in their legal brief that “what they really mean[t] to plead is a breach of oral and
written promises.” (Reply Mem. at 7) (emphasis added). Defendant asserts, however, that even
if plaintiffs’ breach of contract claim was based upon both Simon’s alleged oral promises and the
Letter, Count I would still fail because none of Simon’s alleged promises to repay the Payoff
amount (whether oral or as confirmed in the Letter) were unconditional. (Id. at 3.) Instead,
according to defendant, each of the alleged promises was conditioned upon the happening of one
of the following events: “any enforcement action by the SBA, [a] declaration of default by the
SBA or arrearage in payment of the Loan.” (Id.) Defendant argues that because the Complaint
does not aver that any of these events occurred, plaintiffs have failed to show that Simon’s
obligation to repay the Payoff was ever triggered. (Id.)
B.

Plaintiffs Have Failed to Allege That Simon Made an Unconditional Promise to
Repay the Payoff Amount

It is well-settled that in examining the sufficiency of the Complaint, the allegations in the
pleading – not the arguments advanced by counsel – control. See Shah v. Helen Hayes Hosp., 252
Fed.Appx. 364, 366 (2d Cir. 2007) (“A party may not use his or her opposition to a dispositive
motion as a means to amend the complaint.”) (citing Wright v. Ernst & Young LLP, 152 F.3d
169, 178 (2d Cir. 1998)); Siti-Sites.com, Inc. v. Verizon Commc’ns, Inc., 2010 WL 5392927, at
*5 (S.D.N.Y. Dec. 29, 2010) (“A party may not amend its complaint, however, through
statements made in its motion papers.”), aff’d, 2011 WL 2618884 (2d Cir. July 5, 2011).
Plaintiffs allege that defendant breached the “Agreement,” which term is defined as the June 9,
2003 Letter. (See Compl. ¶¶ 10, 16.) Clearly the Letter does not contain an unconditional

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promise by Simon to repay the Payoff. Rather, the Letter specifically conditions Simon’s
obligation as follows: “[I]n the event Delta Trading Corp. does not pay its obligation and there is
an attempt on the part of the [SBA] to enforce its mortgage, then I will indemnify and hold you
harmless . . . .” (Compl, Ex. A.) Because plaintiffs do not allege the occurrence of either of the
conditions set forth in the Letter, i.e., that Delta did not pay the SBA Loan or that the SBA
attempted to enforce its mortgage, the Letter alone cannot sustain plaintiffs’ breach of contract
claim.
While plaintiffs have alleged that the Letter constitutes the agreement between the parties,
however, they have not specifically alleged that the Letter sets forth the entire parameters of the
parties’ agreement. To the contrary, plaintiffs rely on oral statements allegedly made by Simon
both prior and subsequent to June 9, 2003 as further evidence of the contents of the agreement
between the parties. This implicates the parol evidence rule, which has been stated as follows:
When two parties have made a contract and have expressed it in a
writing to which they have both assented as the complete and accurate
integration of that contract, evidence, whether parol or otherwise, of
antecedent understandings and negotiations will not be admitted for
the purpose of varying or contradicting the writing.
Garza v. Marine Trans. Lines, Inc., 861 F.2d 23, 26 (2d Cir. 1988) (citation omitted). When,
however, a writing “is not integrated, the parol evidence rule does not apply and extrinsic
evidence of a separate oral agreement can be considered.” Starter Corp. v. Converse Inc., 170
F.3d 286, 295 (2d Cir. 1999) (citing Bourne v. Walt Disney Co., 68 F.3d 621, 627 (2d Cir.
1995)).
Where, as here, “a contract lacks an express integration clause the district court must
determine whether the parties intended their agreement to be an integrated contract by reading
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the writing in light of the surrounding circumstances.” Id. at 295 (internal quotation marks
omitted). In making this determination, the Court may consider the following factors:
[W]hether the document in question refers to the oral agreement, or
whether the alleged oral agreement between the parties is the sort of
complex arrangement which is customarily reduced to writing;
whether the parties were represented by experienced counsel when
they entered into the agreement; whether the parties and their counsel
negotiated during a lengthy period, resulting in a specially drawn out
and executed agreement, and whether the condition at issue is
fundamental . . . .
Arias-Zeballos v. Tan, 2006 WL 3075528, at **7-8 (S.D.N.Y. Oct. 26, 2006) (quoting Morgan
Stanley High Yield Sec., Inc. v. Seven Circle Gaming Corp., 269 F. Supp. 2d 206, 214 (S.D.N.Y.
2003)). In this case, however, the Court need not determine whether the Letter constituted an
integrated agreement. Even assuming arguendo that the Letter was not an integrated agreement,
and, thus, the parol evidence rule did not preclude consideration of the alleged oral promises,
plaintiffs’ claim would still fail.
The Complaint contains two separate allegations regarding the oral promises made by
Simon. (See Pl.’s Opp’n at 5 (citing Compl. ¶¶ 9, 11).) First, plaintiffs allege that “Simon
Brenner personally assured [Plaintiffs] that he would guarantee the SBA Loan and pay off the
SBA Loan if need be.” (Compl. ¶ 9.) Defendant asserts that the qualifier “if need be” cannot
plausibly be read to include plaintiffs’ “voluntary desire to no longer be guarantors of the Loan,
or [to] provide security for the repayment of the Loan.” (Reply Mem. at 3.) The Court agrees,
particularly given that the Letter, which plaintiffs now argue served as a written confirmation of
this alleged oral promise, contains a clear condition on Simon’s obligation to repay the Payoff.
See Navigant Consulting, Inc. v. Kostakis, 2007 WL 2907330, at *7 (E.D.N.Y. Oct. 4, 2007)

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(noting that “parol evidence of additional contract terms may be admitted to complete the
agreement, so long as the additional terms do not contradict the written terms”) (emphasis
added).
Second, plaintiffs allege that “[a]t various times both prior and subsequent to the
execution of [the Letter], Simon Brenner assured William Brenner and Jacalyn Brenner that he
would bear full responsibility for the SBA Loan and would indemnify and hold William and
Jacalyn harmless in the event of any action on the part of the SBA to seek repayment through the
second mortgage on the Old Bethpage Home.” (Compl. ¶ 11 (emphasis added).) This alleged
oral promise, however, clearly conditioned Simon’s obligation to repay the Payoff on an attempt
by the SBA to foreclose on the mortgage.
In sum, plaintiffs have failed to allege that Simon made an unconditional promise to
repay the Payoff upon plaintiffs’ demand. Rather, the allegations in the Complaint set forth that
any obligation by Simon to repay plaintiffs was conditioned on the SBA attempting to foreclose
on the mortgage of the Old Bethpage Home. Because plaintiffs have not alleged that the SBA
attempted to enforce its mortgage, plaintiffs have failed to demonstrate that Simon’s obligation to
repay plaintiffs was triggered upon the sale of the Old Bethpage Home. Therefore, plaintiffs
have not sufficiently alleged that defendant breached any agreement and defendant’s motion to
dismiss plaintiffs’ first cause of action is granted.
III.

Defendant’s Motion to Dismiss Plaintiffs’ Unjust Enrichment Claim is Granted
In Count II of the Complaint, plaintiffs assert a cause of action sounding in unjust

enrichment. Unjust enrichment is a “quasi-contractual remedy that the law provides where a
contractual relationship has legally failed.” Berman v. Sugo LLC, 580 F. Supp. 2d 191, 210
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(S.D.N.Y. 2008) (citing Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J., Inc.,
448 F.3d 573, 586 (2d Cir. 2006)). “To prevail on a claim for unjust enrichment in New York, a
plaintiff must establish (1) that the defendant benefitted; (2) at the plaintiff’s expense; and (3)
that equity and good conscience require restitution.” Dayton Superior Corp. v. Marjam Supply
Co., 2011 WL 990300, at *9 (E.D.N.Y. Feb. 22, 2011) (quoting Beth Israel, 448 F.3d at 586)
(internal quotation marks omitted).
“The ‘essence’ of [an unjust enrichment] claim ‘is that one party has received money or a
benefit at the expense of another.’” Kaye v. Grossman, 202 F.3d 611, 616 (2d Cir. 2000) (quoting
City of Syracuse v. R.A.C. Holding, Inc., 685 N.Y.S.2d 381, 381 (4th Dep’t 1999)). To support
an unjust enrichment claim a plaintiff must “establish [a] specific and direct benefit” moving
from the plaintiff to the defendant. Id.; see also M+J Savitt, Inc. v. Savitt, 2009 WL 691278, at
*10 (S.D.N.Y. Mar. 17, 2009) (“It is not sufficient for defendant to receive some indirect benefit
– the benefit received must be ‘specific and direct’ to support an unjust enrichment claim.”)
Defendant asserts3 that plaintiffs have failed to allege an essential element of an unjust
enrichment claim in that they have failed to specifically allege “how Simon, a non-shareholder of
[Delta,] which . . .had been out of business for 6 years, obtained any benefit by Jacalyn’s
voluntary act of paying off Delta’s SBA Loan.” (Def.’s Mem. at 10.) Plaintiffs argue that Simon
clearly benefitted from the Payoff, given that “Simon’s son, Dean Brenner, owned 72.5% of
Delta Trading Corporation, and that Simon remained active in the business of Delta and served
as an officer of Delta.” (Pls.’ Opp’n at 12.) This allegation, without more, is simply too
3

Because the Court has dismissed plaintiffs’ claim for breach of contract, it need not address
defendant’s argument that plaintiffs may not simultaneously maintain a claim for breach of
contract and a quasi-contract claim for unjust enrichment. (See Def.’s Mem. at 10-11.)
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attenuated to show that Simon received a direct benefit from plaintiffs’ paying off the SBA Loan.
See M + J Savitt, Inc., 2009 WL 691278 at *10 (finding that when plaintiff lent company money,
the defendant owner of the company was not directly benefitted so as to sustain unjust
enrichment claim; complaint alleged that loan went directly to company and not to company
owner).
Plaintiffs also argue that the fact that Simon, “who signed the Loan as President of Delta,
did not pay off the Loan is, in and of itself, a benefit.” (Pls.’ Opp’n at 12.) The Court notes,
however, that the Complaint contains no allegation that Simon signed the SBA Loan in the
capacity of President of Delta. Rather, this information has been put before the Court by
defendant, who attached a copy of the SBA Loan Note to its attorney’s affidavit. (See Aff. of
Sanford Strenger, dated Dec. 21, 2010, Ex. D.) Moreover, plaintiffs have provided no citations
to legal authority to support their position and have not provided this Court with an explanation
of why it should consider this factual allegation that is not pled in the Complaint. Thus, the
Court declines to consider this argument in connection with the present motion.4
Accordingly, that portion of defendant’s motion seeking dismissal of Count II of the
Complaint is granted, and plaintiffs’ unjust enrichment claim is dismissed.
IV.

Defendant’s Motion to Dismiss Plaintiffs’ Promissory Estoppel Claim is Granted
“A cause of action for promissory estoppel under New York law requires the plaintiff to

prove three elements: 1) a clear and unambiguous promise; 2) reasonable and foreseeable
reliance on that promise; and 3) injury to the relying party as a result of the reliance.” Kaye, 202
4

As noted below, plaintiffs will be given an opportunity to request leave to amend their
Complaint. To the extent they wish to expand upon this argument, their pre-motion conference
letter would be an appropriate avenue to do so.
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F.3d at 615 (citing Readco, Inc. v. Marine Midland Bank, 81 F.3d 295, 301 (2d Cir. 1996)).
Plaintiffs contend that Simon made “a clear and unambiguous promise” to repay the Payoff, and
that they reasonably relied on this promise to their detriment. (See Pls.’ Opp’n at 13 (quoting
Compl. ¶¶ 26-27).) As set forth above, however, plaintiffs have failed to plead that any promise
made by Simon was unconditional. In fact, plaintiffs have alleged that Simon’s promise to repay
plaintiffs was conditioned on the happening of, inter alia, a foreclosure proceeding. Because
plaintiffs have not alleged that such a foreclosure proceeding was ever commenced, Simon’s
obligation to repay them was never triggered. Therefore, plaintiffs have not sufficiently pled that
they were injured as a result of their alleged reliance on Simon’s promises. Accordingly, that
portion of defendant’s motion seeking dismissal of Count III of the Complaint is granted, and
plaintiffs’ promissory estoppel claim is dismissed.
V.

Defendant’s Motion to Dismiss Plaintiffs’ Equitable Estoppel Claim is Granted
In Count IV of the Complaint, plaintiffs allege that they are entitled to recovery under a

theory of equitable estoppel. Equitable estoppel “is properly invoked where the enforcement of
the rights of one party would work an injustice upon the other party due to the latter’s justifiable
reliance upon the former’s words or conduct.” Kosakow v. New Rochelle Radiology Assocs.,
P.C., 274 F.3d 706, 725 (2d Cir. 2001). “Under New York law, the elements of equitable
estoppel are with respect to the party estopped: (1) conduct which amounts to a false
representation or concealment of material facts; (2) intention that such conduct will be acted
upon by the other party; and (3) knowledge of the real facts.” In re Vebeliunas, 332 F.3d 85, 9394 (2d Cir. 2003). “The parties asserting estoppel must show with respect to themselves: (1) lack

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of knowledge and of the means of knowledge of the true facts; (2) reliance upon the conduct of
the party to be estopped; and (3) prejudicial changes in their positions.” Id. at 94.
Defendant argues that plaintiffs have “fail[ed] to plead that Simon is seeking to enforce
anything against them. . . .” (Def.’s Mem. at 14.) Defendant also contends that plaintiffs’
equitable estoppel claim is barred by the applicable six year statute of limitations. (Id.) Plaintiffs
counter that their equitable estoppel claim is not barred by the statute of limitations because the
claim did not accrue until “Plaintiffs became aware or should have become aware of the alleged
fraud,” which was “not until Plaintiffs sold their home and Defendant refused to honor his
promise . . . .” (Pls.’ Opp’n at 14.)
Even assuming that plaintiffs’ claim is timely, the Court finds that it is inadequately pled.
In particular, plaintiffs have failed to allege that Simon’s conduct “amounts to a false
representation or concealment of material facts.” See In re Vebeliunas, 332 F.3d at 93-94.
“Statements relating to the future conduct of the party, rather than a representation concerning a
past or present fact, cannot form the basis for equitable estoppel.” Longview Equity Fund, LP v.
McAndrew, 2007 WL 186769, at *5 (S.D.N.Y. Jan. 23, 2007) (quoting Solow Mgmt. Corp. v.
Hochman, 191 A.D.2d 250, 251 (1st Dep’t 1993)) (internal alterations and quotation marks
omitted); see also DePace v. Matsushita Elec. Corp. of Am., 2004 WL 1558312, at *9 (E.D.N.Y.
July 16, 2004) (noting the difference between “claims premised on promissory estoppel,” which
require reliance based on a “promise[ ] or a misstatement of future intent,” and claims “based on
equitable estoppel,” which require a misrepresentation of fact). Here, plaintiffs’ allegation of
Simon’s false representation is based upon the alleged fact was that he “did not intend to
indemnify and hold Plaintiffs harmless for paying off the SBA Loan in full.” (Compl. ¶ 33.)
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This is a statement relating to Simon’s “future conduct,” not a “representation concerning a past
or present fact.” See Longview Equity, 2007 WL 186769 at *5 (internal quotation marks
omitted). Thus, plaintiffs have not adequately pled a cause of action for equitable estoppel under
New York law, and defendant’s motion to dismiss Count IV of the Complaint is granted.

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CONCLUSION
For the foregoing reasons, defendant’s motion is GRANTED and the Complaint is
dismissed in its entirety. Plaintiffs have not requested leave to amend their pleading in the event
that defendant’s motion was granted. In their motion papers, however, plaintiffs refer to facts not
alleged in the Complaint, which the Court presumes were learned as discovery has progressed
thus far. (See, e.g., Pls.’ Opp’n at 9-10, 12.) Accordingly, plaintiffs will be given one
opportunity to submit a pre-motion conference letter if they wish to request leave to amend the
Complaint. Such a letter, which must be submitted within thirty days of the date of this Order,
shall address the extent to which an amended complaint would cure the deficiencies noted herein.
If plaintiffs submit such a pre-motion conference letter, defendant may submit a response within
fifteen days thereafter. If plaintiffs do not file a pre-motion conference letter within thirty days of
the date of this Order, their right to do so will be deemed waived and the Clerk of the Court will
be directed to close the case.

SO ORDERED.

Dated: September 22, 2011
Central Islip, New York
/s/
Denis R. Hurley
Senior District Judge

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