Cohen v. BMW Investments L.P.

Filing 28

OPINION AND ORDER: This dispute arises from a fraudulent scheme by Philip Teplen (Teplen) and Clifford Roth (Roth) in which Roth and Teplen defrauded Richard Cohen (Cohen) of approximately $2.5 million. Cohen filed this suit against BMW Investm ents, L.P. (BMW) seeking $300,000 that BMW had once deposited but later retrieved from Teplen. Cohen claims that he is entitled to the $300,000 that Teplen returned to BMW under claims of unjust enrichment or money had and received. BMW m oved to dismiss for lack of personal jurisdiction and for failure to state a claim. For the reasons that follow, BMWs motion to dismiss for lack of personal jurisdiction is denied. Its motion to dismiss for failure to state a claim, however, is gra nted. Teplen returned an amount of money to BMW that had originally belonged to BMW and that BMW had a right to recover. Cohen has not pleaded facts sufficient to support a claim that BMW was unjustly enriched by the return of an amount of money it had given to Teplen....BMWs August 11, 2015 motion to dismiss is granted. The Clerk of Court shall enter judgment for BMW and close the case. (Signed by Judge Denise L. Cote on 10/30/2015) (gr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------- X
:
RICHARD B. COHEN,
:
:
Plaintiff,
:
:
-v:
:
BMW INVESTMENTS L.P.,
:
:
Defendant.
:
:
-------------------------------------- X

15cv3154 (DLC)
OPINION AND ORDER

DENISE COTE, District Judge:
APPEARANCES:
For the plaintiff:
Jay B. Itkowitz
Itkowitz & Harwood
305 Broadway, 7th Floor
New York, NY 10007
For the defendant:
Jason Daniel Gerstein
DLA Piper US LLP (NY)
1251 Avenue of the Americas
New York, NY 10020
This dispute arises from a fraudulent scheme by Philip
Teplen (“Teplen”) and Clifford Roth (“Roth”) in which Roth and
Teplen defrauded Richard Cohen (“Cohen”) of approximately $2.5
million. 1

Cohen filed this suit against BMW Investments, L.P.

Both Teplen and Roth are attorneys who have since been
disbarred. Teplen was arrested for stealing client funds in
July 2015 and is currently incarcerated because he cannot pay
bail. Roth pled guilty to federal felony charges related to
several Ponzi schemes and recently finished serving his prison
term.
1

(“BMW”) seeking $300,000 that BMW had once deposited but later
retrieved from Teplen.

Cohen claims that he is entitled to the

$300,000 that Teplen returned to BMW under claims of unjust
enrichment or money had and received.

BMW moved to dismiss for

lack of personal jurisdiction and for failure to state a claim.
For the reasons that follow, BMW’s motion to dismiss for lack of
personal jurisdiction is denied.

Its motion to dismiss for

failure to state a claim, however, is granted.

Teplen returned

an amount of money to BMW that had originally belonged to BMW
and that BMW had a right to recover.

Cohen has not pleaded

facts sufficient to support a claim that BMW was unjustly
enriched by the return of an amount of money it had given to
Teplen.
Background
The following facts are taken from the complaint or from
documents integral to those claims.
exists here.

Diversity jurisdiction

Cohen is domiciled in New York.

BMW is a limited

partnership formed in Texas with its principal place of business
there.

The general partner of BMW is BMW Ventures, LLC, a

limited liability company whose sole member is Wesley J. Mahone
(“Mahone”), a Texas domiciliary.
Through transactions that began in 2011, Cohen lost over
$2.5 million dollars in a fraud committed by Teplen and others.
2

In 2011, Cohen consulted with Teplen about securing a loan for
living and maintenance expenses.

Although the underlying

financial transactions were complex, the upshot of the loan
agreement is that Cohen only received $681,229.02 of more than
$3.2 million that were disbursed purportedly on Cohen’s behalf.
Teplen defrauded him of the rest.
In April 2012, Cohen sued Teplen and related defendants in
state court for fraud, unjust enrichment, conversion, and other
causes of action arising from this fraudulent loan.
filed for Chapter 7 bankruptcy in April 2014.

Teplen

Cohen and Teplen

settled the state court suit and, on February 20, 2015, judgment
was entered against Teplen for $3,303,528.72.

The court also

found that the debt was not dischargeable in bankruptcy.
Teplen and Roth also attempted to defraud BMW.

In November

2010, BMW executed an agreement with Exousia Advanced Materials,
Inc. (“Exousia”), among other corporations (“Exousia
Agreement”).

Roth was the CEO of Exousia and other corporations

involved in this agreement.

BMW agreed to invest a $1,250,000

capital contribution with Energy Lending Group 2010, LLC
(“ELG”), and the agreement included the right to convert
membership in ELG into shares of common stock in Exousia.

After

executing the Exousia Agreement, on Roth’s advice BMW wired
$300,000 to Teplen’s trust account as an initial deposit on the
3

$1.25 million investment.

Teplen was supposed to hold this

money in escrow until BMW instructed him to release the funds.
Instead of releasing the $300,000 when instructed to do so,
Teplen withdrew the funds for his personal use.

In January

2011, BMW exercised its contractual rights under the Exousia
Agreement to opt out of the investment and have its $300,000
deposit returned.

On April 14, 2011, Teplen returned BMW’s

$300,000 deposit via wire transfer.
Cohen alleges that Teplen returned BMW’s $300,000 from
funds that were taken from Cohen through the fraudulent loan.
Cohen pleads several specific facts to support this claim.

For

example, the complaint reproduces an excerpt from Teplen’s
January 13, 2015 deposition in the state court litigation in
which he confirmed that the $300,000 used to pay BMW originally
came from Cohen’s loan.
Cohen filed this suit on April 22, 2015 to recover the
$300,000 that Teplen returned to BMW.

His causes of action

include state law claims for unjust enrichment and money had and
received.

On August 11, 2015, BMW brought this motion to

dismiss arguing (1) that there is no personal jurisdiction here;
and (2) that Cohen fails to state a claim under Rule 12(b)(6),
Fed. R. Civ. P.

The motion was fully submitted on October 2,

2015.
4

Discussion
When deciding a motion to dismiss under Rule 12(b), Fed. R.
Civ. P., a court must “accept all allegations in the complaint
as true and draw all inferences in the non-moving party’s
favor.”

LaFaro v. New York Cardiothoracic Group, PLLC, 570 F.3d

471, 475 (2d Cir. 2009).

In deciding a motion to dismiss, the

court considers “any written instrument attached to the
complaint as an exhibit or any statements or documents
incorporated in it by reference.”

Stratte-McClure v. Morgan

Stanley, 776 F.3d 94, 100 (2d Cir. 2015) (citation omitted).
The plaintiff attached fifteen exhibits to the complaint.
“In order to survive a motion to dismiss for lack of
personal jurisdiction, a plaintiff must make a prima facie
showing that jurisdiction exists.”

Licci v. Lebanese Canadian

Bank, SAL, 732 F.3d 161, 167 (2d Cir. 2013) (citation omitted)
(“Licci II”).

In evaluating whether this standard is met, the

pleadings and any supporting materials are construed in the
light most favorable to the plaintiff.

Id.

“This showing may

be made through the plaintiff's own affidavits and supporting
materials, containing an averment of facts that, if credited,
would suffice to establish jurisdiction over the defendant.”
Southern New England Telephone Co. v. Global NAPs Inc., 624 F.3d
123, 138 (2d Cir. 2010) (citation omitted).
5

On the other hand,

a court “will not draw argumentative inferences in the
plaintiff's favor.”

In re Terrorist Attacks on September 11,

2001, 538 F.3d 71, 93 (2d Cir. 2008) (citation omitted).
Furthermore, a plaintiff may not rely on conclusory statements
without any supporting facts, as such allegations would “lack
the factual specificity necessary to confer jurisdiction.”
Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 185 (2d Cir.
1998).
“To survive a motion to dismiss under Rule 12(b)(6), a
complaint must allege sufficient facts which, taken as true,
state a plausible claim for relief.”

Keiler v. Harlequin

Enters. Ltd., 751 F.3d 64, 68 (2d Cir. 2014); Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (“[A] complaint must contain sufficient
factual matter, accepted as true, to state a claim for relief
that is plausible on its face.”).

“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.”

Parkcentral

Global Hub Ltd. v. Porsche Auto. Holdings SE, 763 F.3d 198, 208
(2d Cir. 2014) (citation omitted).
I.

Personal Jurisdiction

There are two steps to analyzing personal jurisdiction:
To determine personal jurisdiction over a nondomiciliary . . . [courts] first apply the forum
6

state’s long-arm statute. If the long-arm statute
permits personal jurisdiction, [courts] analyze
whether personal jurisdiction comports with due
process protections established under the
Constitution.
Eades v. Kennedy, PC Law Offices, 799 F.3d 161, 168 (2d Cir.
2015) (citation omitted); MacDermid, Inc. v. Deiter, 702 F.3d
725 (2d Cir. 2012) (using this two-step analysis in a diversity
case).

Cohen has satisfied both the state’s long-arm statute

and the constitutional requirements.

Thus, there is personal

jurisdiction over BMW.
A. New York’s Long-Arm Statute
Cohen alleges that personal jurisdiction exists over BMW
under CPLR § 302(a)(1), which provides in relevant part: “As to
a cause of action arising from any of the acts enumerated in
this section, a court may exercise personal jurisdiction over
any non-domiciliary” who “transacts any business within the
state.”

To determine the existence of jurisdiction under

section 302(a)(1), “a court must decide (1) whether the
defendant transacts any business in New York and, if so, (2)
whether this cause of action arises from such a business
transaction.”

Best Van Lines, Inc. v. Walker, 490 F.3d 239, 246

(2d Cir. 2007) (citation omitted).
“[S]ection 302 is a single act statute and proof of one
transaction in New York is sufficient to invoke jurisdiction,
7

even though the defendant never enters New York, so long as the
defendant’s activities were purposeful and there is a
substantial relationship between the transaction and the claim
asserted.”

Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d

158, 170 (2d Cir. 2010) (citation omitted).

“New York

decisions, at least in their rhetoric, tend to conflate the
long-arm statutory and constitutional analyses by focusing on .
. . whether the defendant’s conduct constitutes ‘purposeful
availment.’”

Id. at 169 (citation omitted); see Paterno v.

Laser Spine Inst., 973 N.Y.S.2d 681, 685 (2d Dep’t 2013), aff’d,
24 N.Y.3d 370 (2014) (“In determining the meaning of the phrase
‘transacts any business,’ . . . an entity transacts business
when it purposefully avails itself of the benefits and
privileges of conducting business in New York.” (citation
omitted)).

“Although it is impossible to precisely fix those

acts that constitute a transaction of business . . . it is the
quality of the defendants’ New York contacts that is the primary
consideration.”

Fischbarg v. Doucet, 9 N.Y.3d 375, 380 (2007).

A suit arises out of a transaction in New York “if there is
an articulable nexus, or a substantial relationship, between the
claim asserted and the actions that occurred in New York.”
Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 66 (2d Cir.
2012) (“Licci I”) (citation omitted).
8

There is “no bright-line

test for determining whether the ‘nexus’ is present in a
particular case.” Id. at 67.
specific one.”

Rather, the “inquiry is a fact-

Id. (citation omitted).

Cases that have been

dismissed for lack of this nexus arose from events that had “at
best[] a tangential relationship to any contacts the defendant
had with New York.”

Id. (citation omitted).

Cohen has made a prima facie showing that BMW transacted
business in New York and that this dispute arises out of that
transaction.

Exousia and other corporations involved in the

Exousia Agreement have offices in New York City.

In further

support of personal jurisdiction, the complaint and its attached
exhibits demonstrate that BMW (1) went to New York to negotiate
the Exousia Agreement involving Roth, Teplen, Exousia, and the
other corporations; (2) participated in telephone conferences
with persons in New York and sent letters to New York that were
related to the Exousia Agreement; (3) wired $300,000 to Teplen’s
escrow account in New York and sent him a letter with
instructions relating to that $300,000; and (4) sent letters and
emails to Teplen and other persons in New York in an effort to
retrieve the $300,000 when it became clear that the money was
not being used as directed.
satisfy CPLR § 302(a)(1).

These contacts are sufficient to
New York courts have found that

“using electronic and telephonic means to project [oneself] into
9

New York to conduct business transactions” is enough to satisfy
the long-arm statute.

Deutsche Bank Sec., Inc. v. Montana Bd.

of Investments, 7 N.Y.3d 65, 71 (2006).

BMW’s actions were

“volitional acts” by which it “avail[ed] itself of the privilege
of conducting activities within the forum state,” even though it
was only physically present in New York on one occasion.

C.

Mahendra (N.Y.), LLC v. Nat'l Gold & Diamond Ctr., Inc., 3
N.Y.S.3d 27, 30 (1st Dep’t 2015) (citation omitted).
This suit arises directly from BMW’s contacts with New
York.

Cohen seeks to recover the $300,000 that was the subject

of the Exousia Agreement and that BMW deposited in Teplen’s New
York escrow account.
of these transactions.

Cohen’s complaint is thus a direct result
The “arising from” prong of § 302(a)(1)

“does not require a causal link between the defendant’s New York
business activity and a plaintiff’s injury,” Licci II, 732 F.3d
at 168.

Although BMW’s transactions with Teplen and Roth in New

York did not cause Cohen’s injury, they are a but for cause of
this litigation.

This provides a sufficient relationship

between the claim and the defendant’s contacts with New York.
Id.
BMW’s arguments against personal jurisdiction are not
persuasive.

BMW asserts that it did not transact business in

New York because the agreement with Exousia involved property
10

located in South Carolina and the corporations that were parties
to the agreement are incorporated in Delaware.

These facts,

however, do not defeat jurisdiction because BMW negotiated the
Exousia Agreement in New York and wired $300,000 to Teplen in
New York pursuant to an instruction letter also sent to New
York.

It further wrote letters, emails, and made telephone

calls to New York in order to retrieve its funds.

Whether the

property that was the subject of the initial agreement was in
South Carolina is not dispositive for assessing the number and
quality of BMW’s contacts with New York before, during, and
after the transaction.
BMW also argues that the current suit is not sufficiently
related to the Exousia Agreement to justify specific personal
jurisdiction.

BMW argues that the Exousia Agreement was

separate from its decision to transfer money to Teplen’s trust
account.

Mahone asserts in a declaration that, when he came to

New York to negotiate the Exousia Agreement, he met Teplen
briefly but did not discuss the possibility of transferring
funds to Teplen’s trust account.

It was only several months

later that he transferred money to Teplen to hold in trust while
other parties gathered financing for the agreement.

This

attempt to separate the June 2010 meeting in New York from the
transfer of $300,000 to Teplen is misplaced.
11

The decision to

transfer money to Teplen as a deposit on BMW’s investment in the
Exousia Agreement was directly related to that agreement and to
BMW’s contacts with New York.

Thus, all of BMW’s contacts with

New York related to the Exousia Agreement and transferring money
to Teplen can be taken together to assess specific personal
jurisdiction in this case.

The plaintiff carried his burden at

this stage of showing that $300,000 returned to BMW is related
to the Exousia Agreement such that it is appropriate to consider
the New York connections to each of these when assessing
personal jurisdiction.
Moreover, although some courts have held that “mere payment
into a New York account does not alone provide a basis for New
York jurisdiction,” Pramer S.C.A. v. Abaplus Int’l Corp., 907
N.Y.S.2d 154, 159 (1st Dep’t 2010), BMW’s contacts with New York
are more extensive than simply its purposeful payment to
Teplen’s escrow account.

See Licci v. Lebanese Canadian Bank,

20 N.Y.3d 327, 338 (2012) (“Licci III”) (affirming the principle
that a “defendant’s use of a correspondent bank account in New
York, even if no other contacts between the defendant and New
York can be established” is sufficient for jurisdiction “if the
defendant’s use of that account was purposeful” (citation
omitted)).

BMW’s series of New York contacts related to the

12

Exousia Agreement thus amounts to a transaction of business in
New York under CPLR § 302(a)(1).
Finally, BMW argues in a brief footnote that, even if
personal jurisdiction is proper, venue is improper because the
Exousia Agreement provides that “in any action arising out of or
relating to this Agreement,” venue is proper exclusively in
Texas.
however.

The 2010 agreement binds only parties to that agreement,
Cohen was not a party to the 2010 agreement –- indeed,

according to Mahone’s sworn declaration, before this lawsuit he
had never heard of Cohen or had any dealings with him.

Thus,

the venue provision in the Exousia Agreement does not bind
Cohen’s choice of forum in this action. 2
B. Due Process Clause
“To establish personal jurisdiction over a defendant, due
process requires a plaintiff to allege (1) that a defendant has
‘certain minimum contacts' with the relevant forum, and (2) that
the exercise of jurisdiction is reasonable in the
circumstances.”

Eades, 799 F.3d at 168-69 (citation omitted).

Minimum contacts necessary to support specific personal
jurisdiction “exist where the defendant purposefully availed
BMW did not include Federal Rule of Civil Procedure 12(b)(3) as
a basis for dismissal in its August 11 Notice of Motion. Absent
full briefing and a more developed argument, the Court does not
construe this footnote as containing an alternative ground for
dismissal for improper venue under Rule 12(b)(3).
2

13

itself of the privilege of doing business in the forum and could
foresee being haled into court there,” and the commission of
“some single or occasional acts” may be enough.

Id. at 169

(citation omitted).
If there are minimum contacts, the defendant must “present
a compelling case that the presence of some other considerations
would render jurisdiction unreasonable.”
(citation omitted).

Eades, 799 F.3d at 169

Factors in determining whether exercising

jurisdiction is reasonable include:
(1) the burden that the exercise of jurisdiction will
impose on the defendant; (2) the interests of the
forum state in adjudicating the case; (3) the
plaintiff's interest in obtaining convenient and
effective relief; (4) the interstate judicial system’s
interest in obtaining the most efficient resolution of
the controversy; and (5) the shared interest of the
states in furthering substantive social policies.
Id. (citation omitted); MacDermid, Inc., 702 F.3d at 730-31
(citation omitted) (applying the same five factors in a
diversity action).

The ultimate consideration is “fair play and

substantial justice.”

Id. (citation omitted).

As discussed above, BMW’s transaction of business in New
York is sufficient to satisfy the minimum contacts prong of the
due process test.

BMW purposefully availed itself of the

ability to do business in New York when it negotiated the
Exousia Agreement, sent emails to New York, made telephone calls
here, and wired the $300,000 to Teplen.
14

All of these purposeful

contacts, along with BMW’s efforts to retrieve its funds from
Teplen, are sufficient to satisfy the minimum contacts
requirement.
Exercising personal jurisdiction is also reasonable under
the circumstances.

Although the burden of litigating this case

for a defendant located in Texas counsels against finding
personal jurisdiction, the other factors weigh in favor of
personal jurisdiction or are neutral.

New York has a “manifest

interest in providing effective means of redress for its
residents.”

Chloe, 616 F.3d at 173 (citation omitted).

Further, the third factor “necessarily favors” Cohen since he
resides in New York and his money was taken here.

Id.

The

fourth and fifth factors are neutral because this dispute could
also be resolved in Texas, where BMW is located.
BMW makes brief and conclusory arguments that it does not
have sufficient minimum contacts to satisfy due process, but BMW
does not address the overall reasonableness of personal
jurisdiction.

Even construing BMW’s arguments as “generalized

complaints of inconvenience,” these “do not add up to a
compelling case” that jurisdiction is unreasonable.
(citation omitted).

Id.

The Due Process Clause is therefore

satisfied.

15

II.

Failure to State a Claim

Cohen alleges two causes of action in this case: unjust
enrichment and money had and received, which have similar
elements.

The elements of an unjust enrichment claim are “(1)

the other party was enriched, (2) at the other party’s expense,
and (3) that it is against equity and good conscience to permit
the other party to retain what is sought to be recovered.”
Georgia Malone & Co. v. Rieder, 19 N.Y.3d 511, 516 (2012)
(citation omitted).

Unjust enrichment “is available only in

unusual situations when . . . circumstances create an equitable
obligation running from the defendant to the plaintiff.”
Corsello v. Verizon New York, Inc., 18 N.Y.3d 777, 790 (2012).
“Typical cases are those in which the defendant, though guilty
of no wrongdoing, has received money to which he or she is not
entitled.”

Id. at 791.

“It is well settled that the essential inquiry in any
action for unjust enrichment . . . is whether it is against
equity and good conscience to permit the defendant to retain
what is sought to be recovered.”

Sperry v. Crompton Corp., 8

N.Y.3d 204, 215 (2007) (citation omitted).

In addition, a

“plaintiff cannot succeed on an unjust enrichment claim unless
it has a sufficiently close relationship with the other party.”
Georgia Malone, 19 N.Y.3d at 516. (citation omitted).
16

This

requirement exists in part because unjust enrichment “is a
quasi-contract claim” that contemplates “an obligation imposed
by equity to prevent injustice, in the absence of an actual
agreement between the parties.”

Id. (citation omitted).

Although “a plaintiff need not be in privity with the defendant
to state a claim for unjust enrichment, there must exist a
relationship or connection between the parties that is not too
attenuated.”

Id. (citation omitted).

In upholding a dismissal

of an unjust enrichment claim, the New York Court of Appeals has
held that a relationship is too attenuated where the parties
“simply had no dealings with each other,” and the complaint did
not allege that the parties “had any contact regarding the
purchase transaction.”

Id. at 517-18.

Moreover, a claim for

unjust enrichment was dismissed where the “pleadings failed to
indicate a relationship between the parties that could have
caused reliance or inducement.”

Id. at 517 (citation omitted).

The elements of money had and received are similar to the
elements of unjust enrichment: “(1) defendant received money
belonging to plaintiff; (2) defendant benefitted from the
receipt of money; and (3) under principles of equity and good
conscience, defendant should not be permitted to keep the
money.”

Middle E. Banking Co. v. State St. Bank Int'l, 821 F.2d

897, 906 (2d Cir. 1987) (citation omitted).
17

Like unjust

enrichment, “[a] cause of action for money had and received is
one of quasi-contract.”

Melcher v. Apollo Med. Fund mgmt. LLC,

959 N.Y.S.2d 133, 142 (1st Dep’t 2013).

“It allows plaintiff to

recover money which has come into the hands of the defendant
impressed with a species of trust because under the
circumstances it is against good conscience for the defendant to
keep the money.”

Parsa v. State, 64 N.Y.2d 143, 148 (1984)

(citation omitted).
Cohen has failed to plead that he and BMW have a
sufficiently close relationship and that “equity and good
conscience” permit him to recover from BMW.

On the facts

alleged in the complaint, there was no relationship between
Cohen and BMW of any kind prior to this litigation.

Cohen does

not allege any dealings with BMW, nor does he allege actions
that might lead to reliance or inducement.

The relationship

between BMW and Cohen, to the extent one exists at all, is
merely that they were both defrauded by Teplen and funds from a
fraud against Cohen were used to repay money that rightfully
belonged to BMW.

There are no facts in the complaint indicating

that BMW and Cohen even knew of each other’s existence prior to
this litigation.

See Mandarin Trading Ltd. v. Wildenstein, 16

N.Y.3d 173, 182 (2011) (finding that a relationship was too
attenuated for an unjust enrichment claim where the complaint
18

lacked allegations showing that the parties were at least aware
of each other’s existence).
Cohen’s brief arguments that his relationship with BMW is
sufficiently close to plead a claim of unjust enrichment are not
persuasive.

Citing little legal authority, Cohen asserts that

he and BMW share a direct relationship because BMW received
Cohen’s funds out of Teplen’s account.

The single case 3 that

Cohen cites to support this claim held that there was a
sufficiently close relationship where the plaintiff’s son was an
attorney who stole client funds and the defendants were the
clients whose money was stolen.

Cohn v. Rothman-Goodman Mgmt.

Corp., 547 N.Y.S.2d 881, 882-83 (2d Dep’t 1989).

The plaintiff

sued the defendants on a theory of unjust enrichment after he
reimbursed several escrow depositors on behalf of his son.
at 883.

Id.

The relationship between the plaintiff and the

defendants in Cohn is thus significantly closer than it is here,
On September 25, 2015, after its opposition brief was filed,
Cohen submitted a letter to the Court with an additional New
York Supreme Court case. Cohen v. Jacoby & Meyers, et al., 2015
WL 5703991 (N.Y. Sup. Ct. Sept. 22, 2015). The New York Supreme
Court found that another of Cohen’s lawsuits against other
defendants related to Teplen could go forward. In that case,
Cohen sought “return of funds by or through Teplen to the
Defendant law firm.” Id. The New York Supreme Court opinion
does not provide any other description of the facts, nor does it
analyze in detail the case law related to unjust enrichment.
Thus, without a more developed factual or legal showing, the
Court cannot readily apply the brief analysis from the Jacoby &
Meyers case to the one against BMW.
3

19

where BMW did not know of Cohen’s existence and the parties’
individual transactions with Teplen were not related to each
other.

Cohen has not pleaded any facts showing that BMW knew

that the $300,000 came from Cohen’s fraudulent loan or that BMW
even knew of Teplen’s other fraudulent transactions, with Cohen
or otherwise. 4
Taking the complaint as true, it also cannot be said that
“equity and good conscience” require BMW to give the $300,000 to
Cohen.

BMW indisputably had the right to recover the $300,000

pursuant to the terms of the Exousia Agreement.

BMW timely

exercised its contractual rights and chose not to participate in
the investment, thereby rightfully retrieving the deposit it
made to Teplen’s escrow account.

Cohen has not pled any facts

showing that BMW knew the origins of the $300,000 when Teplen
returned it or that BMW did not have a valid claim to the money
at the time it sought its return.

Further, Cohen’s state court

judgment against Teplen was entered in February 2015, after
BMW’s money was returned.

Principles of equity and good

conscience indicate that, four years after BMW safely escaped a
fraudulent transaction with Teplen, it should not be forced to
hand over its money to Cohen.

Although unjust enrichment “does

It seems unlikely that BMW would have transacted with Teplen
had it known of these other frauds.
4

20

not require the performance of any wrongful act by the
enriched,” Cruz v. McAneney, 816 N.Y.S.2d 486, 491 (2d Dep’t
2006) (citation omitted), it does require that equitable
principles favor disgorgement.
Cohen has not cited any legal authority or provided any
meaningful analysis of why equity and good conscience favor
Cohen on the facts alleged.
Teplen’s fraudulent scheming.

Both parties were victims of
Cohen does not have a greater

entitlement to the $300,000 simply because, unbeknownst to BMW,
Teplen allegedly returned BMW’s deposit from funds deriving from
Teplen’s fraud on Cohen.

BMW should not be punished because it

succeeded in recovering its money from Teplen where Cohen did
not.
BMW is thus not unjustly enriched on the facts set forth in
the complaint.

Principles of equity and good conscience weigh

in favor of allowing BMW to keep its deposit.

Because the

“equity and good conscience” element is also essential to a
money had and received claim, the second cause of action
similarly fails.

21

Conclusion
BMW’s August 11, 2015 motion to dismiss is granted.

The

Clerk of Court shall enter judgment for BMW and close the case.
Dated:

New York, New York
October 30, 2015

__________________________________
DENISE COTE
United States District Judge

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