Case Summary: Saeed Asgahar et al. v. Tringali Realty, Inc. et al.

Factual and Procedural Background

This appeal arises from an action in which the plaintiffs sought, among other things, damages for breach of contract, tortious interference with contract, and violation of the Civil Rights Law. The plaintiffs appealed an order of the Supreme Court, Nassau County (Austin, J.), dated January 21, 2004, which granted the defendants' motion to dismiss the complaint pursuant to CPLR 3211(a)(5) and (7). The appeal was decided by the Appellate Division, Second Department on May 2, 2005, with Prudenti, P.J., and Judges Schmidt, Luciano and Lifson concurring. The appellate court ordered that the underlying order be affirmed, with costs.

Legal Issues Presented

Whether the complaint in the instant action was barred by the doctrine of res judicata based on a prior related action.
Whether the complaint, as pled and in light of evidentiary materials submitted on the motion, stated causes of action for (a) breach of contract (including promissory estoppel), (b) tortious interference with contract, and (c) violations of the Civil Rights Law, such that dismissal under CPLR 3211(a)(7) was improper.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Sclafani v. Story Book Homes, 294 AD2d 559	The doctrine of res judicata does not apply where a dismissal does not involve a determination on the merits.	Used to explain that a prior dismissal that was not on the merits cannot support a res judicata defense to the instant complaint.
Maitland v. Trojan Elec. Mach. Co., 65 NY2d 614	Supports the proposition that dismissals not on the merits do not trigger res judicata.	Cited to reinforce that the prior related action's dismissal for failure to state a cause with leave to replead was not on the merits.
Leon v. Martinez, 84 NY2d 83	On a CPLR 3211(a)(7) motion, allegations in the complaint are to be accepted as true.	Invoked to state the general standard governing motions to dismiss for failure to state a cause of action.
Cayuga Partners v. 150 Grand, 305 AD2d 527	A motion to dismiss should be granted only where, viewing allegations as true, the plaintiff cannot establish a cause of action.	Used to frame the threshold for dismissing pursuant to CPLR 3211(a)(7).
Meyer v. Guinta, 262 AD2d 463	Bare legal conclusions and factual claims flatly contradicted by evidence are not presumed true; when the moving party offers evidentiary material the court must determine if a cause of action exists, not merely whether one was stated.	Applied to explain that, because evidentiary material was submitted, the court evaluated whether plaintiffs actually had causes of action, not only whether their pleading allegations were formally sufficient.
Ahmed v. Getty Petroleum Mktg., Inc., 12 AD3d 385	Support for the principle that evidentiary material can require the court to assess the substantive viability of the pleading.	Referenced alongside Meyer to show the court's duty when the moving party submits evidentiary material on a CPLR 3211(a)(7) motion.
Gurreri v. Associates Ins. Co., 248 AD2d 356	Applied in contexts concerning whether a clear and unambiguous promise exists to support promissory estoppel or breach claims.	Used to support the conclusion that evidence did not demonstrate a clear and unambiguous promise on which plaintiffs could reasonably rely.
Caridi v. Markey, 148 AD2d 653	Relevant to the requirement of a clear and unambiguous promise for promissory estoppel/breach claims.	Cited in conjunction with Gurreri to show the plaintiffs failed to establish the necessary promise to sustain a promissory-estoppel-based breach claim.
Foster v. Churchill, 87 NY2d 744	Principles governing tortious interference with contract, including the requirement that a plaintiff allege the existence of a contract between the plaintiff and a third party.	Cited to support the finding that plaintiffs did not allege the existence of a contract between themselves and a third party, and thus could not sustain a tortious interference claim.
Commodari v. Long Is. Univ., 295 AD2d 302	Further authority on the elements required to state a tortious interference with contract claim.	Used with Foster to show the insufficiency of plaintiffs' pleadings on tortious interference.
Kane v. Orange County Publs., 232 AD2d 526	Illustrates that conclusory assertions of violations of civil rights statutes are insufficient to sustain a cause of action.	Cited to support the court's conclusion that the plaintiffs' bare legal conclusion of unspecified civil rights violations was inadequate.

Court's Reasoning and Analysis

The court engaged in a two-step analysis:

Res judicata: The court concluded that the Supreme Court's determination that the complaint was barred by res judicata was incorrect. The panel observed that the prior related action had been dismissed for failure to state a cause of action but with leave to replead. Because that dismissal was not a decision on the merits, res judicata did not apply. The court cited Sclafani v. Story Book Homes and Maitland v. Trojan Elec. Mach. Co. for this principle.
Failure to state a cause of action (CPLR 3211(a)(7)): The court then considered whether the instant complaint nonetheless failed to state a cause of action. It set out the governing standards: ordinarily allegations in the complaint are accepted as true on a CPLR 3211(a)(7) motion (Leon v. Martinez) and dismissal is proper only when, viewing allegations as true, the plaintiff cannot establish a cause of action (Cayuga Partners). The court clarified, however, that where the moving party submits evidentiary material, the court must determine whether the pleader actually has a cause of action rather than merely whether one has been stated (Meyer v. Guinta; see Ahmed v. Getty Petroleum).

Applying those standards to the record and the evidentiary material submitted on the motion, the court concluded:

The evidence demonstrated there was no clear and unambiguous promise upon which the plaintiffs could have reasonably relied to support a breach of contract claim grounded in promissory estoppel (citing Gurreri and Caridi).
The plaintiffs failed to allege the existence of a contract between themselves and a third party, which is necessary to sustain a tortious interference with contract claim (citing Foster and Commodari).
The plaintiffs' allegation that the defendants violated unspecified civil rights laws amounted to a bare legal conclusion and was insufficient to state a cause of action (citing Meyer and Kane).

Holding and Implications

Holding: The Appellate Division affirmed the Supreme Court's order, with costs.

The court held two key points: (1) res judicata did not bar the instant complaint because the prior related action had been dismissed without a merits determination (dismissal was for failure to state a cause of action with leave to replead), and (2) notwithstanding the inapplicability of res judicata, the instant complaint failed to state causes of action for breach of contract (including promissory estoppel), tortious interference with contract, and violations of the Civil Rights Law. As a result, dismissal pursuant to CPLR 3211(a)(7) was proper given the evidentiary record before the court.

Implications: The direct effect is that the plaintiffs' complaint was dismissed and the order granting defendants' motion to dismiss was affirmed. The opinion does not announce or rely upon any newly created legal rule; it applies established precedents to the facts and procedural posture presented.

Panel: Prudenti, P.J.; Judges Schmidt, Luciano and Lifson, JJ., concurred. Decision date: May 2, 2005.

Show full summary ...

SAEED ASGAHAR et al., Appellants, v. TRINGALI REALTY, INC., et al., Respondents.

Ordered that the order is affirmed, with costs.

The Supreme Court incorrectly determined that the complaint in this action is barred by the doctrine of res judicata. "Where a dismissal does not involve a determination on the merits, the doctrine of res judicata does not apply" ( Sclafani v. Story Book Homes, 294 AD2d 559, 559-560). The complaint in a prior related action was dismissed for failure to state a cause of action upon which relief could be granted, with leave to replead. Therefore, the dismissal was not on the merits, and res judicata does not apply in the instant case ( see Maitland v. Trojan Elec. Mach. Co., 65 NY2d 614, 615).

However, the Supreme Court properly found that the instant complaint failed to state a cause of action upon which relief could be granted. In considering a motion to dismiss for failure to state a cause of action pursuant to CPLR 3211 (a) (7), the allegations in the complaint should be accepted as true ( see Leon v. Martinez, 84 NY2d 83, 87-88). Such a motion should be granted only where, viewing the allegations as true, the plaintiff cannot establish a cause of action ( see Cayuga Partners v. 150 Grand, 305 AD2d 527).

However, "[i]t is well settled that bare legal conclusions and factual claims which are flatly contradicted by the evidence are not presumed to be true on a motion to dismiss for failure to state a cause of action. When the moving party offers evidentiary material, the court is required to determine whether the proponent of the pleading has a cause of action, not whether [he or] she has stated one" ( Meyer v. Guinta, 262 AD2d 463, 464; see Ahmed v. Getty Petroleum Mktg., Inc., 12 AD3d 385, 385-386).

Here, the Supreme Court properly found that the evidence submitted demonstrated that there was no clear and unambiguous promise upon which the plaintiffs could have reasonably relied to sustain a cause of action for breach of contract on a theory of promissory estoppel ( see generally Gurreri v. Associates Ins. Co., 248 AD2d 356, 357; see also Caridi v. Markey, 148 AD2d 653). The plaintiffs also failed to allege the existence of a contract between themselves and a third party to sustain a cause of action for tortious interference with a contract ( see generally Foster v. Churchill, 87 NY2d 744, 749-750; see also Commodari v. Long Is. Univ., 295 AD2d 302).

Moreover, the plaintiffs' bare legal conclusion that the defendants violated unspecified civil rights laws was clearly insufficient to sustain a cause of action ( see generally Meyer, supra; see also Kane v. Orange County Publs., 232 AD2d 526, 527).

ASGAHAR v. TRINGALI REALTY, INC