Ingber et al v. Truffelman et al

Filing 48

MEMORANDUM & ORDER granting in part and denying in part 36 Motion for Summary Judgment; For the foregoing reasons, Dr. Truffelman's motion for summary judgment (Docket Entry 36) is GRANTED IN PART and DENIED IN PART. Specifically, summary ju dgment is GRANTED in favor of Dr. Truffelman: (1) on his claim that the Ingbers breached the Settlement Agreement when they stopped making payments toward fulfilling the agreed-upon Settlement Amount; (2) on his claim that the Settlement Agreement di d not require Dr. Truffelman and the Ingbers to share in the cost of attorney fees in connection with the Kudler Litigation; and (3) to the extent Dr. Truffelman seeks a declaratory judgment that he is entitled to 25% of the value of the two Kud ler Policies that were assigned to the Fensterstock firm. The balance of Dr. Truffelman's motion is DENIED. At this juncture, only minor disputes remain unresolved. But given that both parties still owe one another sums of money that are generally known and quantifiable, the parties are encouraged to meet, confer, and settle this case on amicable terms. So Ordered by Judge Joanna Seybert on 12/9/2015. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
JOEL INGBER and DORIS INGBER,
Plaintiffs,
-against-

MEMORANDUM & ORDER
13-CV-1207(JS)(SIL)

BARRY TRUFFLEMAN and ARLENE
TRUFFLEMAN,
Defendants.
---------------------------------------X
BARRY TRUFFELMAN,
Counterclaim-Plaintiffs,
-againstJOEL INGBER and DAVID INGBER,

Counterclaim Defendants.
---------------------------------------X
APPEARANCES
For Plaintiffs:
Eugene David Kublanovsky, Esq.
Kublanovsky Law LLC
817 Broadway, 5th Floor
New York, NY 10003
For Defendants:

Aaron H. Marks, Esq.
Marissa Ellen Teicher, Esq.
Kasowitz, Benson, Torres & Friedman, LLP
1633 Broadway
New York, NY 10019

SEYBERT, District Judge:
This

case

concerns

the

failure

to

honor

financial

obligations arising out of the breakup of a dental practice.
Plaintiffs Dr. Joel Ingber (“Dr. Ingber”) and Doris Ingber (“Mrs.
Ingber,” and together with Dr. Ingber, “the Ingbers”) commenced
this

action

on

March

8,

2013

against

Defendants

Dr.

Barry

Truffelman

(“Dr.

Truffelman”).

Truffelman”)

and

Arlene

Truffelman

On April 9, 2013, Dr. Truffelman filed an Answer

and asserted various counterclaims against the Ingbers.
Entry 9.)

(“Mrs.

(Docket

Pending before the Court is Dr. Truffelman’s motion for

summary judgment (Docket Entry 36).

For the reasons that follow,

Dr. Truffelman’s motion is GRANTED IN PART and DENIED IN PART.
BACKGROUND1
In 1990 four dentists--Dr. Kudler, Dr. Truffelman, and
the

Ingbers--entered

into

a

partnership

agreement

(the

“Partnership Agreement”) and opened a general dentistry practice
in Manhattan.

(Def.’s 56.1 Stmt., Docket Entry 38, ¶ 1; Pls.’

Opp. Br., Docket Entry 45, at 3.)

Unfortunately in 2001, Dr.

Kudler was diagnosed with coronary artery disease and became unable
to work.

(Def.’s 56.1 Stmt. ¶ 2.)

Dr. Kudler took disability

under the terms of the Partnership Agreement, and the four dentists
executed

a

disability

retirement

agreement

(the

“Disability

Agreement”) promising to make payments to Dr. Kudler.
Dr. Kudler received four years of payments under the
Disability Agreement. (Def.’s 56.1 Stmt. ¶ 4.) In September 2005,
however, Dr. Kudler brought an arbitration proceeding challenging

The following facts are taken from parties 56.1 statements,
along with the declarations and exhibits filed in connection
with Dr. Truffelman’s motion for summary judgment.
1

2

the provisions of the Partnership Agreement and the Disability
Agreement.

(Def.’s 56.1 Stmt. ¶ 4.)
After

a

one-day

hearing,

the

arbitrator

issued

a

decision that: (1) awarded Dr. Kudler $414,407.09; (2) directed
the Ingbers and Dr. Truffelman to repay all outstanding loans on
three life insurance policies taken out on Dr. Kudler’s life (the
“Kudler Policies”) and to assign the Kudler Policies to Dr. Kudler,
and (3) required the Ingbers and Dr. Truffelman to pay punitive
damages,

attorney

fees,

administrative

fees

of

Arbitration Association, and the arbitrator’s fee.
Stmt. ¶ 6.)

the

American

(Def.’s 56.1

On February 8, 2010, Justice Eileen A. Rakower issued

a Decision, Order and Judgment (the “Judgment”) confirming the
arbitrator’s award.
Ingbers

and

Dr.

(Teicher Decl., Docket Entry 39, Ex. C.)
Truffelman

also

appealed

the

Judgment

The
on

December 20, 2010, and the Court will refer to the arbitration and
subsequent litigation initiated by Dr. Kudler as the “Kudler
Litigation.”

(Def.’s 56.1 Stmt. ¶ 16.)

On July 8, 2009, Dr. Truffelman filed an arbitration
demand with the American Arbitration Association alleging breach
of the partnership agreement and breach of the covenant of good
faith and fair dealing.

(Def.’s 56.1 Stmt. ¶ 8.)

In December

2009, the Ingbers and Dr. Truffelman entered into an agreement

3

(the

“Settlement

Agreement”) 2 terminating

settling Dr. Truffelman’s allegations.

the

partnership

and

(Def.’s 56.1 Stmt. ¶ 9.)

Under the terms of the Settlement Agreement, the Ingbers agreed to
pay Dr. Truffelman $360,000 (the “Settlement Amount”) in exchange
for “Dr. Truffelman’s agreement to, among other things, provide
consulting services to the Ingbers, transition his practice to the
Ingbers and transfer [his] rights to the Partnership’s equipment”
to

the

Ingbers.

(Def.’s

56.1

Stmt.

¶ 11.)

The

Settlement

Agreement specified that the $360,000 settlement amount was to be
paid

in

biweekly

installments

beginning

on

January

1,

2010.

(Def.’s 56.1 Stmt. ¶ 12.) Paragraph 10 of the settlement agreement
also obligated the Ingbers and Dr. Truffelman to “remain equally
responsible for any debt, liability, settlement, or any other
obligation arising out of the [Kudler Litigation].”

(Settlement

Agreement ¶ 10.)
At some point, Dr. Kudler initiated a collection action
to recover the money awarded to him in the Kudler Litigation.
(Def.’s 56.1 Stmt. ¶ 20.)

Through the collection action, Dr.

Kudler recovered $655,962.57 from the Ingbers and $66,083.61 from
Dr. Truffelman, for a total of $722,046.18.

(Def.’s 56.1 Stmt.

¶¶ 20-22.)

The Settlement Agreement is Exhibit D to the Teicher
Declaration and can be found at Docket Entry 39-4.
2

4

On March 22, 2012, however, the Appellate Division,
First

Department

Judgment.

issued

a

decision

partially

vacating

the

The Appellate Division’s decision specifically vacated

the attorney fees award, the punitive damages award, that portion
of the award assigning the Kudler policies to Dr. Kudler, and the
requirement that that loans on the Kudler policies be repaid.
(Def.’s

56.1

Stmt.

¶ 18.)

Following

the

First

Department’s

decision, Dr. Kudler was required to repay $162,813.87 to the
appellants.

(Def.’s 56.1 Stmt. ¶ 23.)

The Ingbers subsequently

reached a settlement with Dr. Kudler on November 14, 2012.

In

exchange for bringing the Kudler Litigation to a close, the Ingbers
accepted $150,000 and two of the Kudler Policies.
Stmt. ¶ 24.)

(Def.’s 56.1

Unfortunately, Dr. Truffelman was not a party to the

settlement of the Kudler Litigation.

(Def.’s 56.1 Stmt. ¶ 24.)

On March 29, 2013, the Ingbers assigned two of the Kudler
Policies to their counsel in the Kudler Litigation, Fensterstock
& Partners, LLP (the “Fensterstock Firm”), in satisfaction of the
legal fees they owed.

(Def.’s 56.1 Stmt. ¶ 32.)

But pursuant to

the Settlement Agreement entered into by Dr. Truffelman and the
Ingbers, Dr. Truffelman is entitled to 25% of the proceeds of the
Kudler Policies.3

(Def.’s 56.1 Stmt. ¶ 31.) The Fensterstock firm

There were three Kudler Policies. The Massachusetts Mutual
Life Insurance Company Convertible Life Insurance Policy and the
Massachusetts Mutual Life Insurance Company Whole Life Plan. It
is disputed what became of the third Kudler Policy (the
3

5

subsequently entered into a letter agreement with Dr. Truffelman
in which Dr. Truffelman agreed not to join the Fensterstock firm
as a party in this action in exchange for the Fensterstock firm
agreeing

to

remit

25%

of

the

value

of

the

policies

if

Dr.

Truffelman prevailed on his declaratory judgment counterclaim.
(See Teicher Decl. Ex. L.)
It is undisputed that Dr. Truffelman has not paid his
one-third share of the Judgment incurred in connection with the
Kudler Litigation.

(Def.’s 56.1 Stmt. ¶ 30.)

In addition, there

does not appear to be a legitimate dispute that the Ingbers owe
Dr. Truffelman monies under the terms of the Settlement Agreement.
The Ingbers paid a total of $152,307.81 of the Settlement Amount
to Dr. Truffelman, but stopped making payments in August 2011.
(Def.’s 56.1 Stmt. ¶¶ 25-27.)

Therefore, the Ingbers still owe

Dr. Truffelman $207,692.19 of the settlement amount.4

(Def.’s 56.1

Stmt. ¶¶ 28-29.)

“Mayflower Policy”). Dr. Truffelman contends that the status of
the Mayflower Policy has not been disclosed. (Def.’s 56.1 Stmt.
¶ 34.) Conversely, the Ingbers claim that Dr. Kudler stopped
making premium payments and allowed the Mayflower policy to
lapse. (Pls.’ Countersmt., Docket Entry 44, ¶¶ 24, 34.)
The Ingbers dispute this figure, however, their 56.1
counterstatement does not cite to any evidence in support of
their claim that the figure is not accurate, nor do they provide
any explanation for their disagreement with this particular
fact. (Pls.’ 56.1 Counterstmt. ¶¶ 28-29.)
4

6

On

March

8,

2013,

the

Ingbers

brought

this

action

alleging, inter alia, that Dr. Truffelman breached the Settlement
Agreement by failing to pay his share of the Judgment.
¶ 15.)

(Compl.

Dr. Truffelman subsequently filed counterclaims alleging

that the Ingbers also breached the Settlement Agreement by failing
to pay him the full Settlement Amount.
¶¶ 48-59.)

(Answer, Docket Entry 9,

Dr. Truffelman also asserts that he should be granted

a declaratory judgment establishing that he is entitled to 25% of
the value of the Kudler Policies.

(Answer ¶¶ 48-59.)

Pending

before the Court is Dr. Truffelman’s motion for partial summary
judgment.

Dr. Truffelman primarily seeks summary judgment on his

counterclaims for breach of contract and his claim concerning his
entitlement to 25% of the Kudler Policies. (See Def.’s Br., Docket
Entry 37, ¶ 9-10.)
DISCUSSION
The

Court

will

first

address

the

applicable

legal

standard on a motion for summary judgment before turning to the
parties’ arguments.
I. Legal Standard
Summary judgment is appropriate where “the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”

FED. R. CIV.

P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986); Celotex Corp. v.
7

Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265
(1986).

“In assessing the record to determine whether there is a

genuine issue to be tried as to any material fact, the court is
required to resolve all ambiguities and draw all permissible
factual inferences in favor of the party against whom summary
judgment is sought.”

McLee v. Chrysler Corp., 109 F.3d 130, 134

(2d Cir. 1997).
“The burden of showing the absence of any genuine dispute
as to a material fact rests on the party seeking summary judgment.”
Id.; see also Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90
S. Ct. 1598, 1608, 26 L. Ed. 2d 142 (1970).

A genuine factual

issue exists if “the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.”
248.

Anderson, 477 U.S. at

To defeat summary judgment, “the non-movant must ‘set forth

specific facts showing that there is a genuine issue for trial.’”
Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir. 2000)
(quoting Anderson, 477 U.S. at 256).

“[M]ere speculation or

conjecture as to the true nature of the facts” will not overcome
a motion for summary judgment.

Knight v. U.S. Fire Ins. Co., 804

F.2d 9, 12 (2d Cir. 1986); see also Williams v. Smith, 781 F.2d
319, 323 (2d Cir. 1986) (“Mere conclusory allegations or denials
will not suffice.” (citation omitted)); Weinstock, 224 F.3d at 41
(“[U]nsupported allegations do not create a material issue of
fact.”).
8

II.

Breach of the Settlement Agreement
Dr. Truffelman argues that the Ingbers breached the

Settlement agreement when they ceased making biweekly payments
towards the satisfaction of the Settlement Amount.
9.)

The

Ingbers

do

not

dispute

that

they

(Def.’s Br. at

have

only

paid

$152,307.81 of the agreed-upon $360,000 settlement amount, but
contend

that

judgment

breach

Truffelman’s

summary

of

should

contract

not

be

granted

counterclaim

on

because

Dr.
Dr.

Truffelman still owes the Ingbers his share of the Judgment and
attorney fees incurred in connection with the Kudler Litigation.
(Pl.’s Opp. Br. at 11-12.)

However, Dr. Truffelman’s indebtedness

for costs related to the Kudler litigation are unrelated to the
Settlement

Agreement

that

the

negotiated and entered into.

Ingbers

and

Dr.

Truffelman

Although the Ingbers are certainly

entitled to an offset for the money Dr. Truffelman failed to pay
to satisfy the Judgment, “Offset claims do not bar summary judgment
on . . . payment obligations, unless such obligations and the
offset

claims

involve

contractually

‘dependent’

promises.”

Pereira v. Cogan, 267 B.R. 500, 507 (S.D.N.Y. 2001) (quoting Omark
Indus., Inc. v. Lubanko Tool Co., 266 F.2d 540, 541 (2d Cir.
1959)).

Therefore, summary judgment is GRANTED with respect to

Dr. Truffelman’s claim that the Ingbers breached the Settlement
Agreement when they stopped making payments towards fulfilling the
agreed-upon Settlement Amount.
9

III. Attorney Fees
Dr. Truffelman asserts that he is not obligated to pay
one-third of the attorney fees incurred in the Kudler Litigation.
(Def.’s Br. at 11.)
Settlement

Agreement

The Court agrees.
states

that

Paragraph 10 of the

“[t]he

Parties

shall

remain

equally responsible for any debt, liability, settlement, or any
other

obligation

arising

out

(Settlement Agreement ¶ 10.)

of

the

[Kudler

Litigation].”

And the parties further agreed to

“jointly cooperate in the defense of the Kudler Actions during
their pendency.”

(Settlement Agreement ¶ 10.)

Agreement

not

does

specifically

mention

The Settlement
attorney

fees.

Nevertheless, the Ingbers argue that paragraph 10 required Dr.
Truffelman and the Ingbers to jointly pay attorney fees and costs
resulting from the Kudler Litigation.

“When an obligation to

reimburse another party for its litigation expenses arises by
contract, the terms of that agreement ‘must be strictly construed
to avoid reading into it a duty which the parties did not intend
to be assumed.’”

Goshawk Dedicated Ltd. v. Bank of New York, No.

06-CV-13758, 2010 WL 1029547, at *6 (S.D.N.Y. Mar. 15, 2010)
(quoting Hooper Assocs., Ltd. v. AGS Computers, Inc., 74 N.Y.2d
487, 491, 548 N.E.2d 903, 905, 549 N.Y.S.2d 365, 367 (1989). Here,
it is plain from the language of the Settlement Agreement that the
parties did not contemplate sharing the cost of their attorneys in
10

the Kudler Litigation.

Although they agreed to share the cost of

“any debt, liability, settlement, or any other obligation arising
out of the [Kudler Litigation],” it is not reasonable to infer
that the phrase “any other obligation” required the Ingbers and
Dr. Truffelman to share the cost of attorney’s fees.
evidence

points

to

the

contrary--both

the

In fact, all

Ingbers

and

Dr.

Truffelman had separate counsel in the Kudler Litigation and the
Settlement Agreement also vaguely states that the parties would
“jointly cooperate” in the litigation.

In addition, paragraph 10

of the Settlement Agreement specifically required the parties to
share the legal fees arising out of any state or federal tax audit.
Thus, the plain language of paragraph 10 does not contemplate that
the parties would share the cost of attorney’s fees in the Kudler
Litigation.

To the extent the Ingbers claim that Dr. Truffelman

is specifically obligated to reimburse them for attorney fees they
incurred in connection with the Kudler Litigation, that claim is
DISMISSED as a matter of law.5
IV.

The Kudler Policies
Dr. Truffelman seeks a declaratory judgment that, under

the terms of the Settlement Agreement, he is entitled to 25% of
the proceeds of the Kudler Policies.

(Def.’s Br. at 9-10.)

It is

It is unclear from the record before the Court whether the
Settlement Agreement contemplated that the parties would share
in the costs, other than attorney fees, that resulted from the
Kudler Litigation.
5

11

appropriate to entertain a motion for declaratory judgment when
“(1) when the judgment will serve a useful purpose in clarifying
and settling the legal relations in issue, or (2) when it will
terminate and afford relief from the uncertainty, insecurity, and
controversy giving rise to the proceeding.”

Cont’l Cas. Co. v.

Coastal Sav. Bank, 977 F.2d 734, 737 (2d Cir. 1992) (citation
omitted).

Here,

rendering

a

decision

on

Dr.

Truffelman’s

declaratory judgment counterclaim is appropriate because it will
resolve

an

existing

controversy

between

Dr.

Truffelman,

the

Fensterstock firm, and the Ingbers concerning the Kudler Policies.
Paragraph 11 of the Settlement Agreement states that
“[i]n the event the [ ] Partnership or any of the Parties are
permitted to keep the [Kudler Policies], Dr. Truffelman will be
entitled to 25% of the proceeds of such policies.”
Agreement ¶ 11.)

(Settlement

There is no dispute that following the First

Department’s decision in the Kudler Litigation and Dr. Kudler’s
settlement with the Ingbers, two of the Kudler Policies were
returned to the Ingbers.

The Ingbers subsequently assigned the

two Kudler Policies to their attorneys, the Fensterstock firm in
consideration

for

the

legal

services

they

provided.

The

Fensterstock firm then entered into a letter agreement with Dr.
Truffelman

in

which

Dr.

Truffelman

agreed

not

to

join

the

Fensterstock firm as a party in this action in exchange for
Fensterstock firm agreeing to remit 25% of the value of the
12

policies if Dr. Truffelman prevailed on his declaratory judgment
counterclaim.

In their brief, the Ingbers do not dispute that Dr.

Truffelman is entitled to 25% of the value of the Kudler Policies.
Therefore, Dr. Truffelman’s motion for summary judgment is GRANTED
to the extent he seeks a declaratory judgment that he is entitled
to 25% of the value of the two Kudler Policies that were assigned
to the Fensterstock firm.
V.

Doris Ingber’s Breach of Contract Claim
Dr. Truffelman asks the Court to dismiss Doris Ingber’s

claim for breach of the Settlement Agreement because Doris Ingber
was not a party to the Settlement Agreement.

(Def.’s Br. at 13.)

In opposition, the Ingbers argue that Doris Ingber is the thirdparty beneficiary of the Settlement Agreement because her assets
were used to satisfy Dr. Truffelman’s share of the Judgment
obtained by Dr. Kudler.

(Pls.’ Opp. Br. at 11-12.)

“Generally,

only an intended beneficiary of a contract may assert a claim as
a third-party beneficiary.”

Mortise v. United States, 102 F.3d

693, 697 (2d Cir. 1996) (citation omitted).

Other than the

contract itself, neither party has presented any evidence that
sheds light on whether Doris Ingber was an intended beneficiary of
the

Settlement

Agreement.

Nevertheless,

it

appears

to

be

undisputed that Doris Ingber’s assets were used to satisfy Dr.
Kudler’s judgment and that Dr. Truffelman did not pay his share of
the Judgment, as he promised to do in the Settlement Agreement.
13

Factual issues therefore preclude granting summary judgment in
favor of Dr. Truffelman on Doris Ingber’s breach of contract claim.
CONCLUSION
For the foregoing reasons, Dr. Truffelman’s motion for
summary judgment (Docket Entry 36) is GRANTED IN PART and DENIED
IN PART.

Specifically, summary judgment is GRANTED in favor of

Dr. Truffelman: (1) on his claim that the Ingbers breached the
Settlement Agreement when they stopped making payments toward
fulfilling the agreed-upon Settlement Amount; (2) on his claim
that the Settlement Agreement did not require Dr. Truffelman and
the Ingbers to share in the cost of attorney fees in connection
with the Kudler Litigation; and (3) to the extent Dr. Truffelman
seeks a declaratory judgment that he is entitled to 25% of the
value

of

the

two

Fensterstock firm.

Kudler

Policies

that

were

assigned

to

the

The balance of Dr. Truffelman’s motion is

DENIED.
At this juncture, only minor disputes remain unresolved.
But given that both parties still owe one another sums of money
that

are

generally

known

and

quantifiable,

the

parties

are

encouraged to meet, confer, and settle this case on amicable terms.
SO ORDERED.

Dated:

December
9 , 2015
Central Islip, New York
14

/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.