Gusinski v. Genger

Filing 144

OPINION AND ORDER re: 130 MOTION for Summary Judgment Dismissing the Third Amended Third Party Complaint. filed by Gilad Sharon. For the foregoing reasons, third-party defendants motion for summary judgment is denied. The Clerk of the Court is directed to close the motion for summary judgment. (Docket Entry #130). A conference is scheduled for November 29 at 3:30. (Signed by Judge Shira A. Scheindlin on 11/19/2012) (djc)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

----------------------------------------------------- )(
SAGI GENGER and TPR
INVESTMENT ASSOCIATES, INC.,
on behalf of AG PROPERTIES CO.,
Third-Party Plaintiffs,
OPINION AND ORDER
- against­
10 Civ. 4506 (SAS)
GILAD SHARON,
Third-Party Defendant.

----------------------------------------------------- )(
SHIRA A. SCHEINDLIN, U.S.D.J.:

I. INTRODUCTION
Sagi Genger ("Genger") and TPR Investment Associates, Inc.
("TPR," together "third-party plaintiffs") bring this action seeking enforcement of
a promissory note and contribution and/or indemnification against third-party
defendant Gilad Sharon. Sharon now moves for summary judgment seeking to
dismiss the third-party plaintiffs' complaint in its entirety on the ground that the
claims are precluded by the final judgment in a state court case involving the same
parties. For the following reasons, the motion for summary judgment is denied.
II. BACKGROUND

This lawsuit arises out of a Canadian real estate venture ("AG

1

Properties”) between Gilad Sharon and Sagi Genger’s father, Arie Genger.1 In
2001, AG Properties was incorporated in Nova Scotia.2 Arie Genger served as its
sole director.3 Later in 2001, AG Holdings, another corporation under the sole
directorship of Arie Genger, acquired all of the shares of stock in AG Properties.4
During 2001 and 2002, AG Properties acquired the entire beneficial interest in two
pieces of real property located in Montreal, Canada (the “Durocher” and “Lincoln”
properties).5 TPR, a Delaware corporation beneficially owned at the time by Sagi
Genger and other members of the Genger family, provided AG Holdings the
mezzanine debt financing necessary to acquire the property.6 The properties were
placed in trust in 2002 (the “Lincoln” and “Durocher” Trusts).7
Genger now alleges that Sharon held a fifty percent interest in AG

1

See Amended Answer and Third Amended Third-Party Complaint
(“Compl.”) ¶ 101.
2

See id. ¶¶ 95-96.

3

See id.

4

See id. ¶¶ 96-98.

5

See id. ¶ 99.

6

See id. ¶ 100.

7

See id. ¶ 105.
2

Properties through Omniway, a Cypriot company.8 Genger alleges that Sharon
purchased the stake with a $1.25 million promissory note (the “Omniway Note”)
secured by his shares in AG Properties.9 The Omniway Note was executed on
February 6, 2002.10 The Note provided that the principal sum would be paid in
three annual installments of $125,000 on July 24, 2008, July 24, 2009, and July 24,
2010, with the outstanding principal sum due on July 24, 2011.11 Additionally,
interest of 6.5% per year was due annually beginning on July 24, 2003.12
The Omniway Note contained an acceleration clause allowing AG
Properties to recover the entire unpaid principal amount and all other amounts
payable in an Event of Default :
Upon the occurrence of any Event of Default, the entire unpaid
principal balance and all other amounts payable hereunder shall
become immediately due and payable, in the case of an Event of
Default specified (i) in clause (a) above, at the option of Payee;
and (ii) in clauses (b) or (c) above, ipso facto upon occurrence of
the Event of Default and without notice, demand, or any further

8

See id. ¶ 101.

9

See id.

10

See Omniway Note, Ex. A to 10/1/12 Declaration of John Dellaportas,
third-party plaintiffs’ counsel, in Opposition to Third Party Defendant’s Motion for
Summary Judgment (“Dellaportas Dec.”), at 2.
11

Id.

12

Id.
3

or other action of the payee.13
Clause (a) of the Omniway Note defines an Event of Default as: “Maker’s failure to
pay any of the principal of this Note when due and payable or Maker’s failure to pay
any interest on this Note when due and payable and such failure to pay interest shall
continue for thirty (30) days.”14 Neither Omniway nor Sharon have made any of the
principal or interest payments due under the Omniway Note.15
In 2003, Arie Genger and Sharon agreed to substitute Lerner Manor, an
Israeli company, for Omniway as a fifty percent stockholder of AG Properties for
$25,000 consideration.16 As a result, Sagi Genger alleges that he had no knowledge
of the Omniway Note prior to this litigation.17 In 2004, at the direction of Arie Genger,
Lerner Manor was retroactively substituted as a fifty percent interest holder in both the
Lincoln and Durocher Trusts for the stated consideration of ten dollars.18
In 2004 and 2005, AG Properties sold the Lincoln and Durocher

13

Id. at 3.

14

Id. at 2.

15

See Compl. ¶ 109.

16

See id. ¶ 104.

17

See id. ¶ 112.

18

See id. ¶ 105.
4

properties for a profit.19 AG Properties then gave one million dollars of the proceeds
to AG Holdings, which used that money to purchase Lerner Manor’s fifty percent
interest in AG Properties as well as Lerner Manor’s fifty percent stake in the Lincoln
and Durocher Trusts from Lerner Manor.20 Sharon received the proceeds from these
transactions.21
On October 22, 2007, TPR, AG Properties, Dalia Genger, and D&K
Limited Partnership (“D&K”) filed an action in Supreme Court, New York County,
against Sharon and Lerner Manor alleging fraud, aiding and abetting breach of
fiduciary duty, unjust enrichment, and conversion.22 On July 10, 2009, the Supreme
Court dismissed the Complaint on the grounds that a 2008 divorce arbitration between
Arie Genger and his former wife, Dalia Genger, precluded the claim.23 The divorce
arbitration stemmed from a settlement stipulation that called for a fifty-fifty

19

See id. ¶ 113.

20

See id. ¶ 114.

21

See id.

22

See Third-Party Defendant’s Memorandum of Law in Support of
Motion for Summary Judgment (“Def. Mem.”) at 2.
23

See Order Dismissing Complaint, Ex. 3 to 10/5/12 Declaration of
Elliot Silverman, third-party defendant’s counsel, in further support of Third-Party
Defendant’s Motion for Summary Judgment (“10/5/12 Silverman Dec.”), at 3.
5

distribution of marital assets between Arie and Dalia Genger.24 Following the
distribution of marital property pursuant to the settlement, Dalia Genger alleged that
Arie Genger had undervalued and concealed assets, including the Canadian real estate
venture.25 The arbitrator determined that she “never had any real or equitable marital
interest in the Canadian venture.”26 On September 8, 2011, the Appellate Division
affirmed the Supreme Court’s dismissal of the complaint.27
Vladimir Gusinski, a creditor of AG Holdings, brought a claim for
fraudulent conveyance against Genger in this Court in 2010.28 Gusinski extended a
$2.5 million loan to AG Holdings in 2001. After AG Holdings defaulted in payment,
Gusinski obtained a judgment for approximately $4.35 million in the Supreme Court
of the State of New York.29 In the federal court action, Gusinski alleged that Genger

24

See Brief for Plaintiffs-Appellants TPR Investment Associates, Inc., et
al., Ex. 1 to 9/17/12 Declaration of Elliot Silverman, third-party defendant’s
counsel, in support of Third Party Defendant’s Motion for Summary Judgment
(“9/17/12 Silverman Dec.”), at 1-2.
25

See id. at 9.

26

Id.

27

TPR Investment Assoc., Inc. v. Fischer, 929 N.Y.S.2d 138 (1st Dep’t

2011).
28

See Gusinski v. Genger, No. 10 Civ. 4506, 2010 WL 4877841, at *1
(S.D.N.Y. Nov. 30, 2010).
29

See id. at *2.
6

intentionally depleted AG Holdings’ assets to render it incapable of repaying the loan.30
Genger then filed a third-party complaint against Lerner Manor, Omniway, and Sharon
seeking enforcement of the Omniway Note and contribution and/or indemnification
relating to Gusinski’s claim.31 On May 6, 2011, Genger settled the primary lawsuit
with Gusinski for a sum of money.32 Sharon now moves for summary judgment on
Genger’s claims.
II. LEGAL STANDARD ON A MOTION FOR SUMMARY JUDGMENT
Summary judgment in a defendant’s favor is appropriate only if “there is
no genuine dispute as to any material fact and [defendant is] entitled to judgment as a
matter of law.”33 “An issue of fact is genuine if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party. A fact is material if it might affect
the outcome of the suit.”34
Because Sharon is moving for summary judgment, he “bears the burden

30

See id. at *1.

31

See Compl. ¶¶ 87-127.

32

See id. ¶ 90.

33

Fed. R. Civ. P. 56(a).

34

Fincher v. Depository Trust & Clearing Corp., 604 F.3d 712, 720 (2d

Cir. 2010).
7

of establishing the absence of any genuine issue of material fact.”35 To defeat Sharon’s
motion, third-party plaintiffs “‘must do more than simply show that there is some
metaphysical doubt as to the material facts,’”36 and “may not rely on conclusory
allegations or unsubstantiated speculation.”37
In deciding these motions, I must “construe the facts in the light most
favorable to the non-moving party,” that is, to plaintiffs, “and [] resolve all ambiguities
and draw all reasonable inferences against the movant,” that is, against the defendant.38
“The role of the court is not to resolve disputed issues of fact but to assess whether
there are any factual issues to be tried.”39 “‘Credibility determinations, the weighing
of the evidence, and the drawing of legitimate inferences from the facts are jury
functions, not those of a judge.’”40
III. APPLICABLE LAW
35

Zalaski v. City of Bridgeport Police Dep’t, 613 F.3d 336, 340 (2d Cir.

2010).
36

Brown v. Eli Lilly & Co., 654 F.3d 347, 358 (2d Cir. 2011) (quoting
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)).
37

Id.

38

Brod v. Omya, Inc., 653 F.3d 156, 164 (2d Cir. 2011).

39

Brod, 653 F.3d at 164.

40

Kaytor v. Electric Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010)
(quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000))
(emphasis removed).
8

A. Claim Preclusion
“When a claim has been fully litigated, the doctrine of claim preclusion
generally bars the future litigation both of that claim and of any closely related
claims.”41 A “federal court must give a state court judgment the same preclusive effect
as would be given a judgment under the law of the State in which the judgment was
rendered.”42 Because the relevant antecedent judgment in this case occurred in New
York state court, New York law governs the law of preclusion.
New York “has adopted a transactional approach to claim preclusion.”43
Under that approach, “once a claim is brought to final conclusion all other claims
[between the same parties] arising out of the same transaction or series of transactions
are barred, even if based upon different theories or if seeking a different remedy.”44 “A
pragmatic test [is] applied to make this determination — analyzing whether the facts are
related in time, space, origin, or motivation, whether they form a convenient trial unit,
and whether their treatment as a unit conforms to the parties’ expectations or business

41

Acosta-Pelle v. New Century Fin. Serv., Inc., No. 09 Civ. 2631, 2009
WL 4927634, at *2 (S.D.N.Y. Dec. 17, 2009).
42

O’Connor v. Pierson, 568 F.3d 64, 69 (2d Cir. 2009).

43

McKitchen v. Brown, 481 F.3d 89, 104 (2d Cir. 2007) (citations and
quotation marks omitted).
44

O'Brien v. City of Syracuse, 54 N.Y.2d 353 (1981).
9

understanding or usage.”45
“The primary purposes of [claim preclusion] are grounded in public policy
concerns and are intended to ensure finality, prevent vexatious litigation and promote
judicial economy.”46 However, courts must be careful not to apply the doctrine “too
harshly”, and thus, “‘[i]n properly seeking to deny a litigant two days in court, . . .
deprive [the litigant] of one.’”47
B. Contribution
Contribution provides that one of two or more joint wrongdoers should not
be required to pay more than its share of a common burden.48 Accordingly, contribution
is allowed only among joint tortfeasors.49 “The definition of a joint tortfeasor is fairly
broad. A finding of liability is not required.”50 Therefore, the fact that the prior action

45

Xiao Yang Chen v. Fischer, 6 N.Y.3d 94 (2005) (quotation marks and
citations omitted).
46

Id. (Citations omitted).

47

Id. (quoting Reilly v. Reid, 45 N.Y.2d 24, 28 (1978)).

48

See Epstein v. Haas Sec. Corp., 731 F. Supp. 1166 (S.D.N.Y. 1990).

49

See Fromer v. Yogel, 50 F. Supp. 2d 227, 234 (S.D.N.Y. 1999).

50

Id.
10

in which Gusinski alleged tortious conduct settled, making an ultimate determination
of liability unavailable, does not preclude a contribution action.51
C. Indemnification
Under New York Law, indemnity is a restitution concept permitting
shifting the loss to avoid the unjust enrichment of one party at the expense of the
other.52 Although indemnification claims usually arise from an express agreement by
which one party agrees to hold the other harmless for claims brought against it by a
third-party,53 in the absence of an express contractual provision for indemnification, an
implied right of indemnification can still be found.54 A person is entitled to implied
indemnity when he, “‘in whole or in part, has discharged a duty which is owed by him
but which as between himself and another should have been discharged by the other.’”55
Interpreting New York law, the Second Circuit has identified two sets of
circumstances in which a right to implied indemnification may exist. First,

51

See id.

52

See Mas v. Two Bridges Assoc., 75 N.Y.2d 680 (1990)

53

See Knight v. H.E. Yerkes & Assoc., Inc., 675 F. Supp. 139, 143
(S.D.N.Y. 1987).
54

See Trustees of Columbia Univ. in the City of New York v.
Mitchell/Giurgola Assoc., 109 A.D.2d 449 (1st Dep’t. 1985).
55

Matter of Poling Transp. Corp., 784 F. Supp. 1045, 1048 (S.D.N.Y.
1992) (quoting McDermott v. City of New York, 50 N.Y.2d 211 (1980)).
11

indemnification can be implied from the special nature of a contractual relationship
between two parties; this has been called the “implied contract theory.”56 Second,
indemnification can be implied when there is a great disparity in the fault of two
tortfeasors, and one of the tortfeasors has paid for a loss that was primarily the
responsibility of the other; this tort-based doctrine has been called “implied-in-law”
indemnity.57
IV. DISCUSSION
A. Claim Preclusion
The parties agree that Genger and Sharon were both parties to the 2007
state law claim and that the state court dismissal constituted a final judgment on the
merits.58 Sharon argues that this judgment precludes Genger’s current claim for two
reasons. First, Genger’s claims stem from the same series of transactions at issue in the
prior suit — Sharon’s investment in AG Properties — and thus cannot be brought under
a new legal theory.59 Second, Genger could have brought the claim for enforcement of

56

Peoples’ Democratic Republic of Yemen v. Goodpasture, Inc., 782
F.2d 346, 351 (2d Cir. 1986).
57

See id.

58

See Third-Party Defendant’s Reply Memorandum in Further Support
of Motion for Summary Judgment (“Reply Mem.”), at 2.
59

See Def. Mem. at 13.
12

the Omniway Note in the prior suit because Sharon had defaulted on his interest
payments. Accordingly, Sharon argues, Genger had the option to demand payment of
the entire unpaid principal balance and all other amounts payable under the Note’s
acceleration clause.60
1.

The 2007 Lawsuit Does Not Preclude Genger’s Claim for
Enforcement of the Omniway Note

Sharon’s investment in AG Properties through the Omniway Note
constitutes a distinct transaction from the one at issue in the state court action. The state
court action alleged that Sharon defrauded TPR, AG Properties, Dalia Genger, and
D&K out of the proceeds from the Canadian real estate venture through a sham
transaction.61 That transaction, the substitution of Lerner Manor as a fifty percent
shareholder in AG Properties for $25,000 consideration, took place in 2003.62 Genger
now alleges that Sharon made a bona fide investment in AG Properties via the
Omniway Note in 2002. Because the state court action did not address the Omniway
Note, litigating its enforcement now will not “‘destroy or impair rights or interests’”

60

See id. at 14; Omniway Note at 2.

61

See 10/22/07 Complaint, Ex. 1 to 10/5/12 Silverman Dec., at 23.

62

See Compl. ¶ 104.
13

established in that judgment.63 That both the state court action and Genger’s current
claim involved “essentially the same course of wrongful conduct” — Sharon’s
investment in AG Properties — does not preclude the current action.64 Because the
Omniway Note involved a separate transaction than the one at issue in the state court
action, Genger’s current action does not constitute claim-splitting.65
Moreover, the claims raised in the state court action required different
evidence to support them than Genger’s current claim.66 To enforce the Omniway Note,

63

Sure-Snap Corp. v. State Street Bank & Trust Co., 948 F.2d 869, 874
(2d Cir. 1991) (quoting Herendeen v. Champion Int’l Corp., 525 F.2d 130, 133 (2d
Cir. 1975)).
64

See Storey v. Cello Holdings L.L.C., 347 F.3d 370, 383 (2d Cir. 2003)
(“That both suits involved ‘essentially the same course of wrongful conduct’ is not
decisive.”) (quoting Lawlor v. National Screen Serv. Corp., 349 U.S. 322, 327-28
(1955)).
65

See American Stock Exchange v. Mopex, Inc., 215 F.R.D. 87, 91
(S.D.N.Y. 2002) (“It is well established, under the doctrine of “claim splitting,”
that a party cannot avoid the effects of res judicata by splitting her cause of action
into separate grounds of recovery and then raising the separate grounds in
successive lawsuits. Rather, a party must bring in one action all legal theories
arising out of the same transaction or series of transactions.”) (citations omitted).
66

See Interoceanica Corp. v. Sound Pilots Inc., 107 F.3d 86, 91 (2d Cir.
1997) (“The fact that both suits involved essentially the same course of wrongful
conduct is not decisive; nor is it dispositive that the two proceedings involved the
same parties, similar or overlapping facts, and similar legal issues. A first judgment
will generally have preclusive effect only where the transaction or connected series
of transactions at issue in both suits is the same, that is where the same evidence is
needed to support both claims, and where the facts essential to the second were
present in the first.”). See also N.L.R.B. v. United Techs. Corp., 706 F.2d 1254,
14

Genger must demonstrate that it was a valid contract supported by consideration. In
contrast, the state court fraud claim alleged that Sharon aided in preparing phony
documents in 2003.67 Plaintiffs’ unjust enrichment claim in the 2007 state court action
disputed the existence of a valid contract between Sharon and AG Property for the
purposes of the 2003 transaction.68 Genger now asserts that the parties executed a
different but valid contract in 2002 and seeks to enforce it.69 The 2007 conversion
claim alleged an unauthorized possession of the proceeds from the Canadian real estate
venture by Sharon, rather than the existence of a legitimate investment in the form of
a promissory note.70 Finally, plaintiffs’ breach of fiduciary duty claim in the 2007 state
court action alleged that Sharon aided Arie Genger in breaching his duty to TPR by

1260 (2d Cir. 1983) (“Whether or not the first judgment will have preclusive effect
depends in part on whether the same transaction or connected series of transactions
is at issue, whether the same evidence is needed to support both claims, and
whether the facts essential to the second were present in the first.”).
67

See 10/22/07 Complaint, Ex. 1 to 10/5/12 Silverman Dec., at 23.

68

See id. at 25.

69

See Compl. ¶ 101.

70

See 10/22/07 Complaint, Ex. 1 to 10/5/12 Silverman Dec., at 25. See
also Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400, 403-04 (2d Cir. 2006)
(“According to New York law, ‘[c]onversion is the unauthorized assumption and
exercise of the right of ownership over goods belonging to another to the exclusion
of the owner’s rights.’”) (quoting Vigilant Ins. Co. of Am. v. Housing Auth. of City
of El Paso, Tex., 87 N.Y.2d 36 (1995).
15

participating in the 2003 transaction.71 This requires showing that the 2003 transaction
constituted that breach, that Sharon participated in the breach, and that the plaintiffs
suffered damages as a result.72 Neither the earlier unjust enrichment claim nor the
breach of fiduciary duty claim requires the same evidence as Genger’s current claim for
enforcement of the Omniway Note, nor did they implicate the transaction now at issue.
2.

The Omniway Note’s Acceleration Clause Does Not Bar
Genger’s Enforcement Claim

Res judicata bars claims that parties could have raised in prior actions.73
However, that parties in privity with Genger could have brought a claim to enforce
missed interest payments on the Omniway Note prior to 2008 does not mean that they
were required to bring claims arising from Sharon’s prospective default on payments
not yet due in 2008.74 While the Omniway Note gave the payee the option to accelerate

71

See 10/22/07 Complaint, Ex. 1 to 10/5/12 Silverman Dec., at 24.

72

See Berman v. Sugo LLC, 580 F. Supp. 2d 191, 204 (S.D.N.Y. 2008)
(listing elements of a claim for breach of fiduciary duty).
73

See Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905, 918 (2d Cir.
2010) (“The doctrine of . . . claim preclusion[ ] holds that a final judgment on the
merits of an action precludes the parties or their privies from relitigating issues that
were or could have been raised in that action.”) (quoting Monahan v. New York
City Dep’t of Corr., 214 F.3d 275, 284 (2d Cir. 2000)).
74

See Storey, 347 F.3d at 383 (“Claims arising subsequent to a prior
action need not, and often perhaps could not, have been brought in that prior
action; accordingly, they are not barred by res judicata.”); Sannon-Stamm Assocs.,
Inc. v. Keefe, Bruyette & Woods, Inc., 68 A.D.3d 678 (1st Dep’t 2009) (“since the
16

payments, it did not require the payee to do so.75 Genger retained the option to allow
the Note’s principal to continue accumulating interest rather than cutting his losses and
suing for enforcement of the lesser amount due in 2007. That he exercised this right
does not require this Court to deny him the benefit of the bargain.
Moreover, the confusion surrounding Omniway’s role in the Canadian real
estate venture calls into question whether any of the plaintiffs in the 2007 lawsuit could
have raised the issue of the Omniway Note in that litigation. As recently as 2011,
Sharon denied knowledge of the Omniway Note.76 Moreover, extensive discovery
efforts throughout this litigation and a sanction from this Court precluding Sharon from
testifying regarding the existence of the Omniway Note were necessary to establish the
Note’s existence.77 Accordingly, denying Genger the opportunity to litigate the Note’s
enforcement in the case at hand would deprive a litigant of the chance to bring a claim

issues relating to the nonpayment of the subsequent installments of the placement
fee had not matured when the Civil Court action was brought for nonpayment of
the first installment of the referral fee, and consequently had never been litigated,
this action is not barred by res judicata”); Southold Sav. Bank v. Fisher, 269 A.D.
748, 749 (2d Dep’t 1945) (bondholder’s prior claim for accrued interest and
principal did not bar subsequent claims for later interest installments).
75

See Omniway Note at 2.

76

See 12/14/11 Deposition of Gilad Sharon (“Sharon Dep.”) at 53:10,
144:5-10 (claiming that he “never used Omniway to transact any business”).
77

See Genger v. Sharon, No. 10 Civ. 4506, 2012 WL 3854883, at *6
(S.D.N.Y. Sept. 5, 2012).
17

rather than preserve the finality of a previous judgment.78
3.

Res Judicata Does Not Bar Genger’s Claim for Indemnification
and/or Contribution

Res judicata does not bar Genger’s claim for indemnification and/or
contribution because the claim stems from a 2011 settlement between Genger and
Gusinski.79 Because both the indemnification and contribution claims attempt to shift
the cost of tortious conduct established in 2011from Genger to Sharon, they could not
have been brought in 2007.80
B. Indemnification and/or Contribution
1.

Sharon Failed to Challenge Genger’s Indemnification Claim in
His Motion for Summary Judgment

Sharon argues in his reply brief that the Third-Party Complaint does not
state a claim for indemnification under New York law.81 The Court does not consider
this argument because Sharon did not raise it in his motion for summary judgment.82
78

See Reilly, 45 N.Y.2d at 28 (“These strong policy bases [underlying
res judicata], however, if applied too rigidly, could work considerable injustice.”).
79

See Compl. ¶ 90.

80

See First Millennium, Inc., 607 F.3d at 918 (“Claim preclusion does
not bar claims, even between identical parties, that arise after the commencement
of the prior action.”).
81

See Reply Mem. at 6.

82

See Broder v. Cablevision Systs. Corp., 418 F.3d 187, 202 (2d Cir.
2005) (arguments first raised in reply brief not properly before court). Accord
18

2.

Genger States a Claim for Contribution Under New York Law

Sharon also argues that the Third-Party Complaint does not plead a claim
for contribution because New York law permits contribution only among joint
tortfeasors.83 While true, the settlement giving rise to Genger’s contribution claim
concerned Gusinski’s fraudulent conveyance action. Under New York law, fraudulent
conveyance sounds in tort, not contract.84 Unlike Genger’s claim for enforcement of
the Omniway Note, which stems from the contract itself, the claim for contribution
seeks to force Sharon to share the cost of settling Gusinski’s tort action. Accordingly,
Genger states a claim for contribution under New York law.
V. CONCLUSION
For the foregoing reasons, third-party defendant’s motion for summary
judgment is denied. The Clerk of the Court is directed to close the motion for summary
judgment. (Docket Entry #130). A conference is scheduled for November 29 at 3:30.

Emigra Group, LLC v. Fragomen, Del Rey, Bernsen & Loewy, LLP, 612 F. Supp.
2d 330, 345 (S.D.N.Y. 2009) (“a moving party will not be heard to advance a new
argument for the first time in its reply brief.”).
83

Def. Mem. at 18 n.6.

84

See Shelley v. Doe, 249 A.D.2d 756, 757 (3d Dep’t 1998) (discussing
the nature of fraudulent conveyance claims under New York law).
19

SO ORDERED:

Dated:

New York, New York
November 19,2012

20

-Appearances-

For Third-Party Plaintiffs:
John Dellaportas, Esq.
Evangelos Michailidis, Esq.
Duane Morris, LLP
1540 Broadway
New York, New York 10036
[phone]
For Third-Party Defendant:
William B. Wachtel, Esq.
Julian D. Schreibman, Esq.
Elliot Silverman, Esq.
Wachtel Masyr & Missry LLP
One Dag Hammarskjold Plaza
885 Second Avenue, 47th Floor
New York, New York 10017
[phone]

21