Davis v. M&M Developer, LLC et al

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
________________________________________
In re 	:
: 	Chapter 11
MBM ENTERTAINMENT LLC, 	:
MBM DEVELOPMENT LLC, and 	: 	Case No. 14-10991 through
ALTRIA DEVELOPMENT LLC, 	: 	14-10993
: 	(Jointly Administered)
Debtors. 	:
JANINA Y. DAVIS, 	:
:
Plaintiff, 	:
v. 	: 	Adv. Pro. No. 14-02231 (MEW)
:
M&M DEVELOPER, LLC, MOUSSA 	:
YEROUSHALMI, MURAD YEROUSHALMI 	:
AND ALTRIA, LLC 	:
Defendants. 	:
:
JANINA Y. DAVIS, 	:
:
Plaintiff, 	:
v. 	: 	Adv. Pro. No. 14-02386 (MEW)
:
MOUSSA YEROUSHALMI, MURAD 	:
YEROUSHALMI, FARZENAH 	:
YEROUSHALMI, MBM 	:
DEVELOPMENT, LLC, 	:
AND M&M DEVELOPER, LLC 	:
:
Defendants. 	:
JANINA Y. DAVIS, 	:
:
Plaintiff, 	:
v. 	: 	Adv. Pro. No. 15-01086 (MEW)
:
M&M DEVELOPER, LLC, MOUSSA 	:
YEROUSHALMI, MURAD YEROUSHALMI, 	:
FARZENAH YEROUSHALMI AND MBM 	:
DEVELOPMENT, LLC, 	:
:
Defendants. 	:
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DECISION AND ORDER
On March 26, 2015, the Debtors filed motions for summary judgment (the “SJ Motions”)
in each of the above-captioned adversary proceedings. 	Plaintiff’s counsel requested a conference
with the Court concerning responses, a potential cross-motion, and scheduling; and a conference
call was held on March 31, 2015.
The Court, having reviewed the SJ Motions and having considered the parties’ arguments,
concludes that the issues proposed to be raised by Plaintiff in a cross-motion are fact-intensive and
inappropriate for summary judgment. 	The Debtors’ SJ Motions are denied, without need for
further briefing or argument. 	The Debtors argue that § 544(a) allows the Debtors to negate a
claimed constructive trust. 	However, while this is the view in some Circuits, the Second Circuit
has ruled to the contrary. 	See Sanyo Elec., Inc. v. Howard’s Appliance Corp. (In re Howard’s
Appliance Corp.), 874 F.2d 88, 93-93(2d Cir.1989); see also Buchwald v. Di Lido Beach Resort,
Ltd. (In re McCann), 318 B.R.276, 285 (Bankr. S.D.N.Y. 2004). 	Accordingly, the Court will
hold a trial to consider the constructive trust claim.
The Debtors also argued in the SJ Motions that the complaints only allege breaches of
contract and not separate claims of fraud. 	However, a fair reading of the complaints shows that
they allege that representations were made outside of the contracts, which requires a trial on the
fraud claims. 	Bridgestone/Firestone, Inc. v. Recovery Credit Servs., Inc. 98 F. 13, 20 (2d 1996)
(noting that a fraud claim is distinct from a breach of contract claim where a party alleges “a
fraudulent representation collateral or extraneous to the contract”); see also, Deerfield Comms.
Corp. v. Chesebrough-Ponds, Inc., 68 N.Y.2d 954, 956 (1986).
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Based upon the foregoing, it is hereby
ORDERED, that the Plaintiff’s request to file a cross-motion for summary judgment is
denied; and it is further
ORDERED, that the Debtors’ SJ Motions are denied; and it is further
ORDERED, that this Court’s prior scheduling Orders are hereby amended, so that pre-trial
submissions shall be due on April 13, 2015, a final pre-trial conference shall be held on April 16,
2015 at 10:00 a.m., and the trial will commence either on April 24 or April 27, with the date and
time to be determined at the final pre-trial conference.
Dated: New York, New York
March 31, 2015
s/Michael E. Wiles
UNITED STATES BANKRUPTCY JUDGE
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