The New York State Office of Court Administration is seeking public comment on a proposed amendment to the Rules of the Commercial Division that would add a new Rule 25-a authorizing the use of Virtual Evidence Courtrooms (VECs). The proposal, developed by the Commercial Division Advisory Council, is now open for public comment until August 16, 2025.

According to the Advisory Council’s memorandum in support of the proposed rule, “[t]he integration of technology into courtroom practice has become increasingly vital for enhancing efficiency and accessibility in legal proceedings,” and VECs “represent a significant technological advance, offering a secure, digital platform for managing and presenting evidence during trials.”

The proposed rule would allow Commercial Division justices to “require or permit” the use of VECs in appropriate cases. As explained in the Advisory Council’s memorandum, VECs provide a centralized and secure environment where the court and parties can upload, view, annotate, and reference evidentiary materials electronically – offering “substantial benefits to both the court and litigants.”

The Council concludes that encouraging VEC use would further the Commercial Division’s longstanding reputation for procedural innovation and judicial modernization. “By encouraging the use of VECs,” the memorandum states, “the Commercial Division can continue its mission of promoting procedural efficiency and maintaining its reputation as a leader in judicial modernization.”

Comments should be submitted by August 16, 2025, via email to rulecomments@nycourts.gov with the subject line: “Comments on Proposed VEC Rule.”

We will continue to track this proposal and report on developments that may affect practice in the Westchester Commercial Division.

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In a June 6, 2025 decision by Justice Linda S. Jamieson in Moshe Bain v. Samuel Strulovitch, et al., the Westchester County Commercial Division denied two motions to dismiss in a complex dispute concerning ownership interests in a Mount Vernon nursing home and the real estate on which it operates. The litigation centers on the legal effect of a rabbinical arbitration award issued without the participation of all stakeholders.

Background

The case involves Parkview Operating Co., LLC (the operator of Westchester Center for Rehabilitation and Nursing) and Westchester Gardens Realty LLC (owner of the facility’s real property). Plaintiff Moshe Bain, a minority owner in both entities, challenges a rabbinical arbitration award initiated by Samuel Strulovitch, who claimed an ownership interest despite not being listed among the members of Parkview or Westchester Gardens.

Bain and nominal defendant Robert Bleier allege that the arbitration was conducted without notice to them, and that the resulting award—finding that Strulovitch owns 22% of the operation and realty—improperly impacts their ownership stakes and rights, including rights of first refusal.

In response, Strulovitch and affiliated entities moved to dismiss the petition and Bleier’s cross-claims, arguing that neither Bain nor Bleier had standing to challenge the rabbinical award because they were not parties to the arbitration or its underlying agreement.

The Court’s Decision

Justice Jamieson rejected the defendants’ arguments, holding that:

  • The existence of an arbitration agreement must be determined at a hearing if there is a factual dispute. The Court found that the evidence—including communications by Strulovitch’s rabbinical representative expressing conditional willingness to arbitrate—raised factual issues as to whether an arbitration agreement existed.
  • Standing to challenge the award was not foreclosed under CPLR § 7511(b)(2), which permits a non-party to seek vacatur where their rights are prejudiced and they were not served with a notice of intention to arbitrate. Since Bain and Bleier had no opportunity to participate and their ownership interests may be materially affected, the Court declined to dismiss their claims on this ground.
  • The case presents substantial controversies warranting judicial resolution, including whether the Rockland arbitration was valid, whether the award impacts Bain and Bleier’s interests, and whether the parties agreed to a subsequent arbitration in Brooklyn that might supersede the original award.

Key Takeaways

This decision reinforces the principle that arbitration, even in religious or alternative fora, must comply with basic procedural protections—particularly notice and opportunity to participate—when the rights of non-parties are at stake. The ruling also highlights the nuanced standards for standing under CPLR § 7511 and the importance of factual development when determining the existence of an arbitration agreement.

The case will proceed, and a hearing may be required to resolve disputed issues surrounding the validity and enforceability of the arbitration process and award.

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In Bardy v. Bonnem, Index No. 55909/2023, Justice Linda S. Jamieson of the Westchester County Commercial Division issued a detailed decision addressing contract formation, fiduciary duties, and quasi-contract claims in the context of a failed business venture.

Background

The case arose out of an alleged oral agreement between plaintiff Jack Bardy, an experienced hospitality industry professional, and defendant Joseph Edward Bonnem, an investor seeking to develop a chain of drive-through coffee establishments under the “Ready Coffee” brand. Bardy claimed that, following negotiations in 2016, he and Bonnem reached an agreement under which Bardy would assist in developing the business and, in exchange, would acquire an option to purchase a 25% ownership interest in Ready Coffee through staged payments. Bardy alleged he performed extensive work over several years without compensation, relying on the alleged agreement and Bonnem’s representations.

After discovery, defendants moved for summary judgment dismissing all claims.

The Court’s Ruling

Justice Jamieson granted the motion in part and denied it in part, providing a helpful roadmap on several recurring issues that often arise in business litigation:

1. Breach of Contract Claim Dismissed — No “Meeting of the Minds”

The Court dismissed Bardy’s breach of contract claim, finding that discovery failed to yield sufficient evidence of any binding agreement. Although Bardy pointed to a November 2016 email proposal and alleged oral acceptance, the Court found no contemporaneous writings or other evidence to establish that both parties ever finalized essential terms. Importantly, the Court emphasized the absence of any signed partnership or operating agreement, and credited testimony from the parties — including the mutual acquaintance who introduced them — confirming that no ownership deal was ever consummated.

The Court’s analysis relied on well-established principles that contract formation requires a meeting of the minds on all essential terms. Without such evidence, the breach of contract claim could not survive summary judgment.

2. Quasi-Contract Claims Survive — Dispute Over Uncompensated Services

While dismissing the breach of contract claim, the Court declined to dismiss Bardy’s claims for unjust enrichment and quantum meruit. The record, the Court held, contained sufficient evidence to raise triable issues as to whether Bardy provided valuable services to Ready Coffee without compensation.

Bardy submitted evidence that he performed significant work for Ready Coffee between 2016 and 2019, including recruiting key personnel, developing branding and marketing materials, preparing employee manuals, crafting menus, and leveraging business contacts. Although defendants disputed the value of Bardy’s contributions—arguing that much of his work was either duplicative or substandard—the Court held that these factual disputes must be resolved at trial.

Justice Jamieson also rejected defendants’ argument that the quasi-contract claims were duplicative of the now-dismissed contract claim, emphasizing that the theories of recovery and measures of damages differ.

3. Fiduciary Duty, Constructive Trust, and Accounting Claims Dismissed

The Court granted summary judgment dismissing Bardy’s fiduciary duty, constructive trust, and equitable accounting claims, holding that no fiduciary relationship existed between the parties. The Court found that Bardy and Bonnem were sophisticated business people engaged in an arm’s-length transaction, and Bardy’s evidence of unpaid work was not sufficient to transform their relationship into one of trust and confidence.

Takeaways

The decision in Bardy v. Bonnem illustrates several key principles frequently litigated in Westchester’s Commercial Division:

  • Oral business arrangements—particularly among sophisticated parties—face significant evidentiary hurdles when challenged in litigation. Absent clear documentation of agreed-upon terms, contract claims may not survive.
  • Claims for unjust enrichment and quantum meruit can serve as viable fallback positions where contract formation fails but will turn on proof of the value of services rendered and whether it would be inequitable for defendants to retain those benefits without compensation.
  • Courts are reluctant to impose fiduciary duties in arm’s-length business dealings absent evidence of special trust or reliance.

As the case proceeds to trial on the remaining quasi-contract claims, Bardy serves as a reminder of the importance of clear documentation when negotiating startup ventures and business collaborations.

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On May 20, 2025, the Chief Administrative Judge of the Courts signed Administrative Order 111/25, introducing significant developments for litigators practicing in the Commercial Division. Effective July 7, 2025, the Order adds a new Appendix E – a Model Pre-Trial Order – to Section 202.70 of the Uniform Rules of the Supreme and County Courts and amends the preamble to Commercial Division Rules 25–33.

These changes aim to promote consistency, preparation, and efficiency in the lead-up to trial while preserving judicial flexibility. The newly adopted Model Pre-Trial Order is designed to serve as a practical “tool” for both courts and counsel. It consolidates in one document the core pre-trial activities governed by Commercial Division Rules 27 through 33, including:

  • Mandatory settlement conferences (Rule 30)
  • Motions in limine (Rule 27)
  • Exhibit and deposition coordination (Rules 28–29)
  • Stipulations of undisputed facts and expert testimony (Rule 30)
  • Witness disclosures and pre-trial memoranda (Rules 31–32)
  • Direct testimony by affidavit in non-jury trials (Rule 32-a)
  • Jury charges and verdict forms (Rule 31(c))

Although use of the model order is not mandatory, it is encouraged as a starting point that courts may adapt to reflect their individual practices and preferences. The amended preamble reinforces the importance of thorough pre-trial preparation and the role of cooperation among counsel to ensure efficient case management.

The model order and revised rules are particularly relevant in Westchester County’s Commercial Division, where Justices Jamieson and Walsh actively emphasize streamlined trial preparation and robust pre-trial conferences. Practitioners appearing in Westchester should review these changes and be prepared to incorporate the model order into their litigation planning.

The full text of Administrative Order 111/25 is available here, and we encourage all counsel practicing in the Commercial Division to familiarize themselves with Appendix E before the effective date of July 7, 2025.

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In Gregory F. Holcombe v. James L. Moskovitz and JOY-CPW, Inc., Index No. 67400/2024, Justice Linda S. Jamieson of the Westchester Commercial Division denied a motion to appoint a receiver over the judgment debtor’s business assets. The court found the request premature, as the plaintiff had not yet exhausted other available enforcement tools.

Background 

The plaintiff, Gregory Holcombe, previously obtained a judgment for over $409,000 against defendants James Moskovitz and his company, JOY-CPW, Inc. (“JOY”), arising from unpaid promissory notes. Following that judgment, Holcombe moved to appoint a receiver under CPLR § 5228 to seize and manage JOY’s assets—including intangible property such as intellectual property, archives, royalties, commissions, and revenue-generating contracts—in an effort to satisfy the debt. 

Plaintiff argued that such relief was necessary given the defendants’ alleged evasive conduct. Holcombe claimed that after serving an information subpoena on a bank, defendants falsely told the bank a stay was forthcoming. The referenced “stay” was allegedly based on a separate action the defendants filed in New York County, in which a judge declined to sign an order to show cause to stay the Westchester judgment. 

Plaintiff contended that JOY’s business was complex and involved commingled accounts and intangible assets that would require skilled management for liquidation—factors supporting the appointment of a receiver. 

Defendants’ Opposition 

The defendants did not dispute the outstanding judgment but characterized Holcombe’s actions as part of a vendetta. They argued that a receivership would irreparably harm the company and its stakeholders, which include production personnel, station workers, and the defendants themselves. Moskovitz contended that the value of the business lies in its goodwill, specialized knowledge, and his personal involvement—making it unsuitable for liquidation through a receiver. 

They urged the court to give them time to pay the judgment voluntarily and asserted, without offering a payment plan or documentation, that full repayment would be made in due course. They also referenced a bankruptcy proceeding filed by Moskovitz’s wife as a factor in resolving the judgment, though the court noted they provided no timeline or connection between that proceeding and Holcombe’s claim. 

The Court’s Analysis 

Justice Jamieson denied the motion, finding that the high bar for appointing a receiver under CPLR § 5228 had not been met. The statute allows the appointment of a receiver when “a special reason appears to justify one.” The court cited the Court of Appeals’ decision in Hotel 71 Mezz Lender LLC v Falor, 14 NY3d 303 (2010), which sets forth factors for evaluating such requests: (1) availability of alternative remedies, (2) likelihood of collection via receivership, and (3) risk of fraud or insolvency without one. Here, Holcombe had taken only minimal enforcement steps—serving restraining notices and subpoenas—and had not demonstrated that those methods were inadequate.

The court emphasized that it was too early in the enforcement process to appoint a receiver, especially where no showing had been made that a receivership would increase the likelihood of satisfying the judgment. Justice Jamieson also noted that receiverships are particularly appropriate for intangible assets with no ready market that cannot be sold by a sheriff. While JOY’s assets might fall into that category, the plaintiff had not yet taken the intermediate steps necessary to justify such a drastic remedy. 

Conclusion 

The court denied the motion for a receiver as premature but issued a cautionary note: plaintiff may renew the application if defendants obstruct future enforcement efforts. To that end, the court directed Holcombe to re-serve his restraining notices and subpoenas and ordered defendants to respond promptly and refrain from interfering with judgment enforcement. 

This ruling underscores the Westchester Commercial Division’s measured approach to post-judgment enforcement and its reluctance to grant extraordinary relief such as receiverships unless the record clearly demonstrates the need. Judgment creditors must first exhaust standard collection tools before turning to more aggressive remedies. 

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Starting July 7, 2025, a new Rule 23 will take effect in the Commercial Division of the New York Supreme Court, authorizing the filing of amicus curiae briefs for the first time in trial-level proceedings. This important development further cements the Commercial Division’s role—both statewide and here in Westchester—as a forward-thinking venue for resolving sophisticated business disputes.

The new rule, adopted by Administrative Order of Chief Administrative Judge Joseph A. Zayas, allows non-parties to seek leave to submit amicus briefs by motion, typically brought on by order to show cause. The movant must file the proposed brief with its motion and make specified disclosures regarding its interest in the matter and any involvement by the parties or third parties in the brief’s preparation or funding. The court may deny the motion if it would cause judicial recusal or undue delay.

The rule was proposed by the Commercial Division Advisory Council, which noted that, unlike appellate courts, trial courts generally lack formal procedures for considering amicus briefs. The Council emphasized that the Commercial Division’s unique docket—regularly featuring high-stakes and precedential commercial matters—makes it especially well-suited for a rule encouraging thoughtful input from outside stakeholders.

As the Advisory Council explained, Rule 23 will “distinguish the Commercial Division from other trial courts and build upon its reputation as a leading and innovative court for resolving significant litigation.”

In Westchester, where the Commercial Division is overseen by Justices Linda Jamieson and Gretchen Walsh, the new rule provides a clear mechanism for industry groups, bar associations, and other interested entities to weigh in on cases that may have broader business implications. It also reflects the continued evolution of the Commercial Division into a model of specialized, efficient, and transparent judicial administration.

For litigants and practitioners in Westchester, Rule 23 opens the door to more robust legal discourse and may offer valuable support in cases that raise novel or complex legal questions. As the Commercial Division continues to innovate, this latest addition further enhances its standing as a national leader in commercial adjudication.

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Westchester Commercial Division Justice Linda S. Jamieson issued a detailed Decision and Order in Camsan Inc. v. OPRA III LLC, Index No. 64814/2022 (and related actions), addressing multiple motions involving mechanic’s liens filed against a large residential construction project in Rye. The decision clarifies the application of New York’s Lien Law in the context of condominium developments and reaffirms the courts’ liberal approach toward lien enforcement.

Background

The case involves an expansive and complex construction project at 120 Old Post Road in Rye, now a condominium property. Numerous contractors and suppliers—ranging from general contractor Hudson Meridian Construction Group to smaller subcontractors like Camsan Inc., Valex Enterprises, and GFC Lighting—filed mechanic’s liens after allegedly not being paid for their work.

The property owner, OPRA III LLC (“OPRA”), moved to discharge all liens, asserting that they were facially invalid. OPRA argued that the liens (1) were filed against outdated or incorrect lot designations, (2) included sold units that were no longer owned by OPRA, or (3) were improper “blanket liens” against the entire condominium.

Multiple lienholders cross-moved to amend their liens nunc pro tunc to reflect only unsold units or those still owned by OPRA, and also sought court orders compelling OPRA to disclose ownership details.

Legal Analysis

Justice Jamieson rejected OPRA’s attempt to invalidate the liens wholesale, emphasizing several key principles of New York lien law:

  1. Liberal Construction of Lien Law: Citing Court of Appeals and Second Department precedent, the court reiterated that the Lien Law is remedial in nature and should be construed liberally to protect the rights of contractors and suppliers. Technical defects—such as overbroad property descriptions—do not necessarily invalidate a lien.
  1. Substantial Compliance Standard: The court found that the lienholders had substantially complied with the Lien Law. Even where a lien encompassed more property than appropriate, it could be enforced against the portion properly subject to the lien. Justice Jamieson cited E. Coast Mines & Materials Corp. v Golf Course Props. Co., 228 AD2d 545 [2d Dep’t 1996] as controlling authority.
  1. Doctrine of Laches Applies to Lien Challenges: The court found OPRA’s delay in raising challenges to the liens troubling. OPRA had participated in discovery and mediation for over a year without objecting to the liens’ validity. Justice Jamieson held that such delay prejudiced the lienholders, making OPRA’s position susceptible to a laches defense.
  1. Lien Validity Despite Condominium Conversion: Even though OPRA had sold some units, it still retained ownership of others at the time many liens were filed. Thus, consistent with Mussen v Franklin Square Assocs., V., LLC, 22 AD3d 1022, 1023 [3d Dep’t 2005], the liens remained valid as to the units still owned by OPRA and were not invalid on their face.

Ruling

In the Court’s Decision & Order, Justice Jamieson:

  • Denied OPRA’s motion to discharge the liens, except as to three defaulting parties.
  • Permitted all lienholders to amend their liens nunc pro tunc to properly identify unsold or OPRA-owned units.
  • Directed OPRA to disclose with particularity which units it currently owns and which it owned at the time each lien was filed.
  • Denied all requests for escrow or attorneys’ fees.

Conclusion

This ruling underscores the Commercial Division’s continued fidelity to the Lien Law’s remedial purpose. Owners seeking to challenge mechanic’s liens must do so promptly and cannot rely on hypertechnical defects—especially where the underlying labor and materials benefited the property. The decision is a reminder to contractors and owners alike that equity, timing, and a fair reading of the law all play crucial roles in lien enforcement.

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On January 28, 2025, New York State’s Chief Administrative Judge signed Administrative Order #38-2025, setting in motion significant changes for the Commercial Division’s jurisdiction over cases seeking only equitable or declaratory relief. Here’s what you need to know:

What’s Changing?

Until now, parties seeking treatment in the Commercial Division simply had to certify that their case was “presumptively commercial” according to the Rules for Commercial Division assignment. However, effective March 31, 2025, any case seeking exclusively equitable or declaratory relief must now also meet a county-specific monetary threshold. For Westchester County, that threshold is set at $100,000.

How Is the Threshold Determined?

The Court will assess whether a case meets the monetary requirement by considering the “value of the object of the action.” Under the new rule, this value is defined as the greatest of the following: (1) the value of the suit’s intended benefit; (2) the value of the right being protected; and (3) the value of the injury being averted.

This assessment is based on the details provided in the Commercial Division addendum and the operative pleadings at the time the party applies for Commercial Division assignment.

Why the Change?

The amendment, proposed by the Commercial Division Advisory Council, aims to streamline the Division’s caseload. By requiring a monetary threshold even for cases solely seeking equitable or declaratory relief, the Division hopes to reduce the number of less resource-intensive cases. This shift is intended to allow the Division to focus more effectively on complex and high-stakes litigations that demand its specialized resources.

Impact on Practitioners and Litigants

  • For Attorneys: When filing for Commercial Division assignment, it will no longer be sufficient to simply certify a case as “presumptively commercial.” Attorneys must now carefully evaluate the monetary value of the case’s benefits or potential injury, ensuring that they meet the set threshold for Westchester County.
  • For Litigants: Parties must be prepared to demonstrate that their case’s “object” meets or exceeds the monetary requirement, which may influence how claims are presented and strategized in the pleadings.

Final Thoughts

This administrative amendment is expected to refine the scope of cases accepted by the Commercial Division. By imposing a clear monetary benchmark, the Division reinforces its commitment to managing its resources effectively and addressing only those cases that genuinely require its specialized attention.

Stay tuned for further updates as the implementation date approaches, and feel free to reach out with any questions or comments regarding this development.

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The New York County Lawyers Association (NYCLA) recently celebrated a major milestone in the legal community, honoring the 30th Anniversary of the Commercial Division of the New York State Supreme Court. The event took place on March 4, 2025, at The Pierre Hotel in Manhattan, bringing together legal luminaries, corporate counsel, and judiciary members, including Westchester Commercial Division Justice Linda S. Jamieson, to recognize the Division’s impact on business litigation in New York.

A Night of Recognition and Celebration

NYCLA’s 2025 Annual Gala paid tribute to the Commercial Division’s pivotal role in shaping commercial litigation over the past three decades. The evening’s highlight was the presentation of NYCLA’s highest honor, the William Nelson Cromwell Award, to the Commercial Division Justices from across New York State, recognizing their dedication to upholding excellence in commercial law.

Among the distinguished speakers at the event were: Chief Judge Rowan D. Wilson, Chief Administrative Judge Joseph A. Zayas, Heather C. Mulligan, President and CEO of The Business Council of New York State, Inc., and Brian P. Campbell, Treasurer of the Association of Corporate Counsel (ACC).

Their remarks underscored the Commercial Division’s crucial role in maintaining New York’s position as a global center for business and commerce.

Honorary General Counsel Committee: A Powerful Tribute

Demonstrating widespread corporate support for the Commercial Division, 54 General Counsel from leading corporations joined the Honorary General Counsel Committee to commemorate this special occasion. Chaired by Michael Fricklas, Chief Legal Officer and Corporate Secretary of Advance, this committee included top legal executives from major organizations such as The New York Times, BlackRock, Goldman Sachs, Pfizer, Morgan Stanley, and NBCUniversal. Their participation reflected the Division’s significant influence on corporate litigation and governance.

A Historic Event for the Bench and Bar

NYCLA’s Annual Gala has long been considered the “bench and bar event of the year,” attracting prominent judges, attorneys, and business leaders. This year’s celebration was no exception, as the event brought together state and federal trial and appellate court judges, along with government officials, to honor the Commercial Division’s lasting impact.

The event was chaired by Robert L. Haig of Kelley Drye & Warren LLP, further cementing its prestige within the legal community.

Westchester’s Commercial Division: A Premier Venue for Business Disputes

As part of New York’s esteemed Commercial Division, Westchester County’s Commercial Division, led by Justices Linda Jamieson and Gretchen Walsh, has become a key forum for resolving complex business disputes in Westchester. With its efficient case management, sophisticated rulings, and business-savvy judiciary, Westchester’s Commercial Division has earned a reputation for excellence, attracting high-profile commercial cases and providing a crucial venue for businesses operating in the region. Its continued success highlights the Division’s statewide impact and reinforces New York’s leadership in commercial litigation.

The Legacy of the Commercial Division

Since its establishment, the Commercial Division has been a model for efficiency, expertise, and fairness in resolving complex commercial disputes. The 30th Anniversary celebration was a testament to its success and the enduring commitment of the judiciary, legal professionals, and business leaders who support its mission.

NYCLA’s recognition of the Commercial Division at this year’s Gala reaffirmed the importance of a robust, business-friendly legal framework in New York, ensuring that the state remains a premier hub for commerce and law.

In Pantelis P. Mestousis et al. v. Michael Saccente, Justice Gretchen Walsh of the Westchester Commercial Division denied dueling motions for summary judgment in a sprawling dispute over a failed multimillion-dollar quarry acquisition and an alleged $70,000 personal loan. The decision highlights the court’s rigorous application of summary judgment standards, particularly in the context of fraud-based claims and oral agreements.

Background

The dispute arises from a complex business relationship between plaintiff Pantelis Mestousis—a seasoned real estate investor—and defendant Michael Saccente, a former tenant of one of Mestousis’ Bronx properties. In 2021, the two partnered to acquire a quarry and related assets in Wassaic, NY, through two jointly owned entities: 138 Kent Rd LLC and Harlem Valley Gravel & Sand Inc.

The plaintiffs allege that Saccente made material misrepresentations regarding his financial condition to secure commercial loans needed to close the quarry transaction. Specifically, they claim that Saccente submitted a Personal Financial Statement (PFS) to Westfield Bank omitting several judgments and a federal tax lien. The bank later withdrew its financing commitment, citing those omissions. Plaintiffs assert that the failed deal caused them to lose a $250,000 down payment and incur substantial additional costs in alternative financing and professional fees.

Separately, plaintiffs also claim that they loaned Saccente $70,000 in June 2022 to purchase a Ferrari—a loan he allegedly never repaid.

The amended complaint includes seven causes of action: fraudulent inducement, fraudulent concealment, negligent misrepresentation, breach of contract, breach of oral contract, money had and received, and unjust enrichment. Both sides moved for summary judgment—Saccente seeking dismissal of all but the oral contract claim, and the plaintiffs seeking partial summary judgment on liability.

The Court’s Analysis

Justice Walsh denied both motions in full, finding triable issues of fact across the board.

Fraud and Misrepresentation Claims (First–Third Causes of Action):

The court declined to dismiss the plaintiffs’ fraud-based claims, rejecting Saccente’s argument that Mestousis, as a sophisticated investor, could not have reasonably relied on his alleged misstatements. The court emphasized that reasonable reliance is often a factual question, especially where the parties had a longstanding relationship—including a history as landlord and tenant—and jointly owned business entities.

Moreover, the plaintiffs presented evidence that Saccente told Mestousis he had over $3 million in liquid assets and failed to disclose substantial outstanding judgments. Although Saccente claimed the bank’s decision to withdraw financing was due to missed deadlines, the court found a sufficient factual dispute as to causation.

Breach of Contract (Fourth Cause of Action):

The court also found factual disputes precluded summary judgment on the breach of contract claim. Saccente argued that he merely applied to be a guarantor and could not control the bank’s decision. Plaintiffs contended that his failure to disclose material financial information breached his obligation and directly caused the financing to collapse. Again, the court held that these issues required trial.

Ferrari Loan Claims (Fifth–Seventh Causes of Action):
The court denied summary judgment on both sides regarding the alleged $70,000 loan for a Ferrari purchase. Plaintiffs claimed they made the loan via three checks from their companies and that Saccente purchased the car shortly thereafter. Saccente disputed the loan characterization, asserting instead that the checks were part of a cash-for-checks exchange. Given the absence of a written agreement and the factual disputes, summary judgment was inappropriate.

Conclusion

Justice Walsh’s ruling underscores the principle that summary judgment is a “drastic remedy” not to be granted where credibility and intent are at issue. Here, competing narratives about financial disclosures, causation of damages, and even the nature of a purported Ferrari loan will be resolved at trial. 

The case serves as a cautionary tale for business partners: clarity in documentation and early due diligence is essential, especially in high-value ventures involving personal guarantees.

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