Hyde v. Okolie

Summary

The Appellate Division, First Department, affirmed an order denying summary judgment to Phyllis Weitzman and Bow Faith Co., LLC, which sought dismissal of claims arising from alleged fraud and misuse of funds belonging to William Boise. The court held that factual issues remained concerning aiding and abetting fraud, actual fraud, undue influence, promissory estoppel, unjust enrichment, joint and several liability, and constructive trust. The court also stated that Bow Faith's assets might be reached if plaintiff proves at trial that the entity was used to perpetrate fraud.

Holdings

1. Defendants failed to establish entitlement to summary judgment dismissing the claims for aiding and abetting constructive fraud, aiding and abetting actual fraud, and actual fraud.
2. Defendants failed to establish entitlement to summary judgment dismissing the undue-influence claim.
3. Defendants were not entitled to summary judgment dismissing the promissory-estoppel claim.
4. Defendants did not establish entitlement to summary judgment dismissing the unjust-enrichment claim.
5. Co-conspirators found liable for aiding-and-abetting fraud may be held jointly and severally liable for damages; therefore, the joint-and-several-liability cause of action was properly sustained.
6. A constructive trust was an available remedy under the circumstances because Boise and Weitzman had a confidential relationship arising from their purported joint venture.
7. If plaintiff proves at trial that Weitzman used Bow Faith to perpetrate fraud on Boise, plaintiff may be entitled to reach the entity's assets.

Questions Presented

1. Whether defendants established entitlement to summary judgment dismissing the aiding-and-abetting constructive-fraud, aiding-and-abetting actual-fraud, and actual-fraud claims.
2. Whether defendants established entitlement to summary judgment dismissing the undue-influence claim arising from the Maspeth transaction.
3. Whether defendants established entitlement to summary judgment dismissing the promissory-estoppel claim.
4. Whether defendants established entitlement to summary judgment dismissing the unjust-enrichment claim.
5. Whether the joint-and-several-liability and constructive-trust causes of action were properly sustained.
6. Whether Bow Faith's assets could potentially be reached if plaintiff proves at trial that Weitzman used the entity to perpetrate fraud.

Disposition

affirmed