Moshe Meisels, et al. v. Michael I. Bernstein, etc., et al.

Summary

The Appellate Division, Second Department modified an order denying summary judgment to Michael I. Bernstein and Michael I. Bernstein, P.A., holding that the plaintiffs lacked standing to pursue fraud and aiding-and-abetting-fraud claims. The court concluded that the plaintiffs failed to raise a triable issue concerning ownership of the invested funds and that Moshe Meisels was judicially estopped from asserting standing based on prior representations. The court otherwise affirmed denial of the defendants’ requests to strike the complaint and impose sanctions for fraud on the court.

Holdings

1. The defendants established prima facie that the plaintiffs lacked standing because the transferred funds belonged to Rightmatch and the plaintiffs did not suffer a concrete and particularized injury. The plaintiffs failed to raise a triable issue of fact, so summary judgment dismissing the first and second causes of action against the defendants was required.
2. The defendants were not entitled to have the complaint stricken or to obtain sanctions because they failed to establish by clear and convincing evidence that Meisels knowingly engaged in deceitful conduct that undermined the integrity of the judicial process.

Questions Presented

1. Whether the defendants established prima facie that the plaintiffs lacked standing to assert fraud and aiding-and-abetting-fraud claims.
2. Whether the plaintiffs raised a triable issue of fact regarding standing, including through judicial estoppel, agency principles, or an assignment of Rightmatch's interests.
3. Whether the defendants established by clear and convincing evidence that the plaintiffs committed fraud on the court warranting striking the complaint or sanctions.

Disposition

reversed_and_remanded