Cooper v. Cooper

U.S. District Court E.D.N.Y.

07/12/ 2022

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK BROOKLYN OFFICE

EDITH COOPER,

MEMORANDUM & ORDER

Plaintiff, 19-CV-3025 (NGG) (ST)

-against-

ADA S. COOPER,

Defendant.

NICHOLAS G. GARAUFIS, United States District Judge.

Plaintiff Edith Cooper brings this action against Defendant Ada

S. Cooper for alleged breach of a loan agreement. Defendant

moves to dismiss for failure to state a claim, or in the alternative

for summary judgment, under Federal Rules of Civil Procedure

12 and 56. For the following reasons, Defendant’s motion is DE-

NIED in part and GRANTED in part.

I. BACKGROUND

The court constructs the following statement of facts from the

parties’ Local Rule 56.1 Statements and the other admissible ev-

idence submitted. Except where otherwise noted, the following

facts are undisputed. Where the parties allege different facts, the

court notes the dispute and credits Plaintiff, as the non-moving

party, if her assertion is supported by evidence in the record. All

evidence is construed “in the light most favorable to the non-

moving party” with “all reasonable inferences [drawn] in its fa-

vor.” ING Bank N.V. v. M/V Temara, IMO No. 9333929, 892 F.3d

511, 518 (2d Cir. 2018).1

1 When quoting cases, unless otherwise noted, all citations and quotation

marks are omitted, and all alterations are adopted.

For the purposes of the motions to dismiss, the court considers

only facts alleged in the Amended Complaint as well as docu-

ments attached to it or incorporated by reference, all of which

the court accepts as true in that posture. See Harris v. Mills, 572

F.3d 66, 71 (2d Cir. 2009).

Plaintiff and Defendant are sisters, once very close but now es-

tranged. (Am. Compl. ¶ 1 (Dkt. 42); see also Pl.’s Rule 56.1

Statement Response (“Pl’s 56.1”) (Dkt. 55-29) ¶ 1.) Plaintiff is a

member of the board of directors of Amazon and PepsiCo, and a

former executive at Goldman Sachs. (Am. Compl. ¶ 8; Pl.’s 56.1

¶ 5.) Defendant is a former lawyer who received her J.D. from

Harvard Law School and practiced for 14 years before changing

careers and becoming a dentist. (Am. Compl. ¶ 9; Pl.’s 56.1 ¶ 3.)

Over the years, Plaintiff both loaned and gifted money to Defend-

ant on several occasions in various amounts. (Am. Compl. ¶ 1;

Pl.’s 56.1 ¶¶ 10-11.)

Beginning in 2014, Plaintiff and her husband began urging De-

fendant to sign a loan agreement memorializing a combination

of three of the sums Defendant had previously received from

Plaintiff. (Am. Compl. ¶¶ 32-43; Pl.’s 56.1 ¶¶ 10-13.)

The first of the sums memorialized in the agreement was a

$220,000 “Marital Loan” extended by Plaintiff to Defendant and

Defendant’s then-husband between 2002 and 2003, which De-

fendant has acknowledged as a loan and for which the parties

signed a promissory note. (Am. Compl. ¶¶ 12-13; Pl.’s 56.1 ¶ 17.)

In 2013, as part of Defendant’s divorce proceedings, a New York

Supreme Court determined that $149,700 of the Marital Loan

remained unpaid and assigned repayment to Defendant. (Am.

Compl. ¶ 16; Pl.’s 56.1 ¶ 19.) Defendant received the other two

sums from Plaintiff in 2014: $87,000 in February and $185,000

in October. (Am. Compl. ¶¶ 19, 25; Pl.’s 56.1 ¶ 22.) All or nearly

all of this money was used by Defendant to settle the costs and

attendant legal fees of her arduous divorce. (Am. Compl. ¶¶ 32-

43; Pl.’s 56.1 ¶ 22.)

After weeks of arguments between Plaintiff, Defendant, and

Plaintiff’s husband over the amount to be reflected in the agree-

ment memorializing these alleged loans, the parties settled on a

total sum of $414,300, with a three-year maturity term and an

annual interest rate of 0.38%. (Am. Compl. ¶¶ 32-34; Pl.’s 56.1

¶¶ 34-43.) The parties had previously agreed that Defendant

would repay whatever money she owed Plaintiff out of her share

of their then-living father’s estate. (Am. Compl. ¶ 21; Pl.’s 56.1

¶ 23.) To reflect that mutual understanding, an extension feature

was discussed and added to the loan agreement so that it could

be renewed at the de minimis interest rate until such time as De-

fendant’s proceeds from the estate were sufficient for repayment

of the principal. (Am. Compl. ¶¶ 37-38; Pl.’s 56.1 ¶ 44; see also

Loan Agreement (Dkt. 42-1) at ¶ 5.) Defendant sent drafts of the

agreement for review to both a lawyer and an accountant, and

the parties finally agreed to and signed the document in or

around May 2015. (Am. Compl. ¶¶ 39, 43.)

The loan agreement was intended to recognize a past benefit

conferred on Defendant (the borrower) by Plaintiff (the lender),

and not to create an additional or future obligation. Both Plaintiff

and Defendant explicitly identified this agreement to each other

and to others as memorializing prior dealings during the negoti-

ation, execution, and subsequent attempted enforcement of the

agreement – and Defendant has repeatedly stated that she un-

derstood the agreement as a memorialization, not expecting to

receive any further money from Plaintiff. (Id. ¶¶ 3, 34, 36, 38, 42,

45, 52; see also Pl.’s 56.1 ¶¶ 45, 49.)

Their ultimate signed agreement, however, contained a mistake

characterizing their relationship in the future tense, stating in its

first paragraph “Lender promises to loan” instead of “Lender has

loaned.” (Am. Compl. ¶¶ 35, 53-54; see also Loan Agreement ¶ 1.)

That paragraph provided the following:

Lender promises to loan the principal amount (the

“Loan”) of four hundred fourteen thousand, three hun-

dred dollars ($414,300) to Borrower, and Borrower

promises to repay this principal amount and all accrued

interest to Lender, at 535 North Street, Greenwich CT

06830, or at such other address as may be provided by

Lender to Borrower in writing, with interest payable on

the unpaid principal balance at the rate of .38 percent

per annum, calculated yearly in arrears.

(Loan Agreement ¶ 1.) Neither party noticed this mutual mistake

as to the temporal nature of the agreement, and both parties con-

tinued to believe that money had been extended by Plaintiff to

Defendant in the past, not that any money would be extended in

the future. (Pl.’s 56.1 ¶¶ 43, 45; see also Dep. of Edith Cooper (Ex.

2) (Dkt. 58-1) at 80:13-18; Aff. in Opp’n of Edith Cooper (Dkt.

55-27) ¶ 40; Decl. of Ada S. Cooper (Dkt. 54-22) ¶ 44; Dep. of

Ada S. Cooper (Dkt. 55-2) 279:18-280:24.) The agreement also

contained a merger clause, stating that “This Agreement consti-

tutes the entire agreement between the parties and there are no

further items or provisions, either oral or otherwise.” (Loan

Agreement ¶ 13.)

In January 2016, Defendant made her first interest payment un-

der the agreement of $1,574.34, which represented the agreed-

upon 0.38% of the loan’s full $414,300 principal. (Am. Compl.

¶ 46; see also Ex. N to Viducich Decl. (Ex. N) (Dkt. 54-15) at 1.)

The parties dispute whether further interest payments were

made, with Defendant asserting that she made payments of the

same amount in at least January 2017 and January 2018, and

Plaintiff acknowledging only one late payment in August 2018.

(Am. Compl. ¶ 46; Pl.’s 56.1 ¶¶ 52, 54, 58, 60-62; Ex. N at 1.)

The sisters’ father died in January 2016, and while the parties

now dispute whether Defendant has received sufficient funds

from his estate to trigger the extension feature of their agree-

ment, it is undisputed that the principal on the loan had not been

repaid as of January 2018. (Am. Compl. ¶¶ 49-50; Pl.’s 56.1

¶ 59.) In May 2019 Plaintiff brought this action to enforce the

agreement, demanding repayment of $414,300, plus interest.

(See generally Compl. (Dkt. 1) at 6.)

In 2020, the court issued a Memorandum & Order granting De-

fendant’s motion to dismiss and holding the parties’ loan

agreement unenforceable because its plain text described future,

rather than past, loans – even though no future loans were in fact

ever contemplated. (See June 29, 2020 Memorandum & Order

(Dkt. 29).) In February 2021, Plaintiff amended her complaint

seeking to reform the “Unenforceable Agreement,” or alterna-

tively for damages under one or more of the equitable doctrines

of promissory estoppel, unjust enrichment, or money had and re-

ceived. (See Am. Compl. at 11, 13-15.) After the completion of

discovery, Defendant now moves to dismiss Plaintiff’s claims for

reformation, promissory estoppel, unjust enrichment, and money

had and received. In the alternative, she seeks summary judg-

ment on the same claims.

II. DEFENDANT’S MOTION TO DISMISS OR, IN THE

ALTERNATIVE, FOR SUMMARY JUDGMENT

A. Legal Standards

To survive a motion to dismiss under Rule 12(b)(6), the

Amended Complaint must “contain sufficient factual matter, ac-

cepted as true, to state a claim to relief that is plausible on its

face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Plausibility

depends on a host of considerations: the full factual picture pre-

sented by the complaint, the particular cause of action and its

elements, and the existence of alternative explanations so obvi-

ous that they render plaintiff’s inferences unreasonable.” Fink v.

Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013). In evalu-

ating whether the claim meets the plausibility standard, “the

court may consider any written instrument attached to the com-

plaint as an exhibit or incorporated in the complaint by reference,

as well as documents upon which the complaint relies, and which

are integral to the complaint.” Subaru Distribs. Corp. v. Subaru of

Am., Inc., 425 F.3d 119, 122 (2d Cir. 2005). The court then lib-

erally construes these facts and draws all reasonable inferences

in Plaintiff’s favor. New York Pet Welfare Ass’n, Inc. v. City of New

York, 850 F.3d 79, 86 (2d Cir. 2017).

Alternatively, Defendant moves for summary judgement under

Rule 56, which provides that “[t]he court shall grant summary

judgment if the movant shows that there is no genuine dispute

as to any material fact and the movant is entitled to judgment as

a matter of law.” Fed. R. Civ. P. 56(a). “A party opposing a

properly supported motion for summary judgment may not rest

upon mere allegation or denials of [the] pleading, but must set

forth specific facts showing that there is a genuine issue for trial.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). “Where

the record taken as a whole could not lead a rational trier of fact

to find for the nonmoving party, there is no genuine issue for

trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.

574, 587 (1986).

Finally, Defendant has asserted affirmative defenses of the stat-

ute of frauds and the statute of limitations under Fed. R. Civ. P.

8(c)(1). In asserting affirmative defenses, Defendant bears the

burden of establishing a prima facie case that Plaintiff has vio-

lated the statutes, and the burden then shifts to Plaintiff to rebut.

B. Discussion

1. The Reformation Claim

a. Motion to Dismiss

Defendant moves to dismiss Plaintiff’s reformation claim on three

bases, arguing that it should not go forward because (1) it would

effectively nullify New York General Obligations Law (“GOL”) §

5-1105; (2) it would conflict under the circumstances with other

common law doctrines; and (3) Plaintiff fails to allege a mutual

mistake of fact. For these reasons, Defendant argues, Plaintiff’s

Amended Complaint fails to state a claim.

The court first addresses the threshold question of whether the

common law doctrine of reformation is available to satisfy New

York’s statutory framework for enforcing contracts premised

upon past consideration. Reformation is

not . . . for the purpose of alleviating a hard or oppres-

sive bargain, but rather to restate the intended terms of

an agreement when the writing that memorializes that

agreement is at variance with the intent of both parties.

George Backer Mgmt. Corp. v. Acme Quilting Co., 46 N.Y. 2d 211,

219 (1978). Past consideration generally “is no consideration

and cannot support an agreement because the detriment did not

induce the promise.” Greenberg v. Greenberg, 646 F. App’x 31, 32

(2d Cir. 2016) (summary order) (applying New York common

law). However, New York law provides that:

A promise in writing and signed by the promisor or by

his agent shall not be denied effect as a valid contractual

obligation on the ground that consideration for the

promise is past or executed, if the consideration is ex-

pressed in the writing and is proved to have been given

or performed and would be a valid consideration but for

the time when it was given or performed.

GOL § 5-1105.

Here, Plaintiff’s Amended Complaint seeks to reform the parties’

Unenforceable Agreement so as to satisfy GOL § 5-1105. But De-

fendant argues, in essence, that allowing Plaintiff to do so would

void or “nullify” the GOL requirement. Because the written agree-

ment has been held unenforceable, the argument goes, it would

be anomalous to use a common law doctrine (reformation) in

order to create an implied contract that would satisfy a statute

which itself expressly requires an enforceable writing.

But this is in fact the opposite of what Plaintiff requests. Plaintiff

seeks reformation not to nullify, but rather to apply GOL § 5-

1105. As this court previously ruled, the reason the Unenforcea-

ble Agreement is unenforceable is that “the agreement, by its

terms, expressly contemplates a future loan.” (See June 29, 2020

Memorandum & Order (Dkt. 29) at 5.) And because the Unen-

forceable Agreement contemplates a future and not a past loan,

it does not implicate GOL § 5-1105, since GOL § 5-1105 applies

only to contracts that depend upon past consideration.

To be sure, reformation cannot be used to supply terms to a con-

tract to which the parties did not agree, or to cure an otherwise

invalid contract. See Citibank, N.A. v. Morgan Stanley & Co. In-

tern., PLC, 797 F. Supp. 2d 254, 264 (S.D.N.Y. 2011)

(“Reformation of contract is not a matter of resolving an ambi-

guity in a contract but rather of supplying what the parties clearly

intended to include but inadvertently omitted.”). If one of the

requirements of GOL § 5-1105 had been unmet (for example, if

the promise had not been in writing or signed by the promisor or

an agent; if the consideration had not been expressed in the writ-

ing, or not proved to have been given or performed; or if the

consideration would not have been valid but for the time when

it was given or performed), then reliance on the doctrine of refor-

mation to cure such a shortcoming would be beyond the

equitable power of the court. But GOL § 5-1105 does not require

that the consideration for a contract be in the past. To the con-

trary, the statute provides that the temporal nature of the

consideration is not a requirement for a valid contract.

Reformation in this case is an example of parties correcting their

written document to reflect the preexisting intention and under-

standing of the parties to commemorate a past loan, as permitted

by statute. Reformation does not “nullify” GOL § 5-1105 because

the court must still apply the statute to decide whether the con-

tract, reformed to correctly reflect the parties’ intent, measures

up to its other requirements. The court therefore rejects this basis

for dismissing the reformation claim.

Second, Defendant argues that other courts have declined to per-

mit reformation when doing so would conflict with other

common law doctrines. Defendant cites three cases, two concern-

ing the rule against perpetuities in property law (Compania

Embotelladora Del Pacifico, S.A. v. Pepsi Cola Co., 607 F. Supp. 2d

600, 602-04 (S.D.N.Y 2009) and Symphony Space v. Pergola

Props., 88 N.Y.2d 466, 484-85 (1996)), and one concerning the

parol evidence rule (Intl. Multifoods Corp. v. Commercial Union

Ins. Co., 98 F. Supp. 2d 498, 506-07 (S.D.N.Y. 2000)). None of

these cases apply to reformation, however. Each may be distin-

guished from this case because of the substance and purpose of

the legal doctrines they apply. Both the rule against perpetuities

and the parol evidence rule are meant to defeat the intentions of

the parties, even when clearly expressed. Those doctrines share

a common purpose that is directly at odds with that of the equi-

table doctrine of reformation. Whereas reformation seeks to

amend a contract to comport with the intent of the parties, the

parol evidence rule and the rule against perpetuities are designed

to protect a contract from the intention of the parties. It makes

sense, then, to avoid applying the reformation doctrine in those

circumstances, but not in these.

Finally, Defendant alleges that Plaintiff cannot allege a mutual

mistake of fact. For a reformation claim to succeed, it must be

based on a mistake of fact and not of law. “It is well settled in the

federal courts [as it was at common law] that equity will not

grant reformation for a mistake of law.” Greenberg v. Arsenal

Bldg. Corp., 50 F. Supp. 700, 703 (S.D.N.Y 1943). “To prove mu-

tual mistake of fact, plaintiffs must allege that both parties

assumed a certain state of facts to exist at the time of the making

of the contract and that assumption was erroneous.” de la

Gueronniere v. Simon, No. 97-CV-4813 (DC), 1998 WL 226199,

at *3 (S.D.N.Y. May 4, 1998), aff’d, 166 F.3d 1199 (2d Cir.

1998).

Here, the court concludes that the parties’ mistake is one of fact,

and not of law. Specifically, the parties mistakenly believed the

Unenforceable Agreement (which they obtained from the web-

site legalcontracts.com) memorialized past consideration already

conferred by Plaintiff on Defendant.2 So the Unenforceable

Agreement is not a failed attempt to meet the requirements of a

law misunderstood or unknown to the parties, as in the cases De-

fendant cites, but rather akin to a clerical, factual error.

Reformation is therefore proper to cure this mutual mistake.

Because the court rejects all three of Defendant’s arguments, her

motion to dismiss the reformation claim is DENIED.

b. Motion for Summary Judgment

Alternatively, Defendant argues that even if the court declined to

grant her motion to dismiss Plaintiff’s reformation claim, she

should still be entitled to summary judgment on it. The court dis-

agrees.

2 This is true even though the parties now dispute the amount they had

intended to memorialize.

The reformation doctrine evolved in equity because an action at

law afforded no relief against an instrument secured by fraud or

as a result of mutual mistake. See 5 Holdsworth, History of Eng-

lish Law, 292-93, 327-28 (1945). But to overcome the heavy

presumption that a deliberately prepared and executed written

instrument manifested the true intention of the parties, New York

courts have required “evidence of the highest character.” Chris-

topher & Tenth St. R. R. Co. v. Twenty-Third St. Ry. Co., 149 N.Y.

51, 58 (1896). That standard must be especially demanding

when a litigant seeks to invoke the power of the court not merely

to sever the contractual relationship between the parties, but, as

here, to continue that relationship in a modified form. Further-

more, for the court to reform a contract, there must be evidence

of this strength “not only that mistake . . . exists, but [also] what

was really agreed upon between the parties.” Collins v. Harrison-

Bode, 303 F.3d 429, 435 (2d Cir. 2002).

Plaintiff seeks “reformation of the Loan Agreement to make clear

that it applies to past consideration Plaintiff extended to Defend-

ant, in the amount of $414,300.” (Am. Compl. at 15.) The court

previously identified “the operative language of the agreement”

to be the term that Plaintiff “promises to lend” to Defendant. (See

June 29, 2020 Memorandum and Order at 5.) At trial, Plaintiff

would seek to prove the parties’ intentions such that this single

phrase would be reformed from “promises to lend” to “has lent.”

In seeking summary judgment on the reformation claim, Defend-

ant emphasizes that she believed the amount of the loan to be

incorrect, even though she apparently negotiated, reviewed, dis-

cussed, signed, and paid interest on the full $414,300 sum

without objection. Defendant argues that, because the parties

(apparently unbeknownst to Plaintiff) were not in agreement

upon the amount that had been loaned, the contract is not eligi-

ble for reformation. But the amount of the loan is not the subject

of Plaintiff’s reformation claim. Although Defendant’s disputed

understanding of the amount owed would certainly have been

relevant to any effort to reform the amount listed in the loan,

Plaintiff seeks only to reform the temporal error the parties made

such that the contract would again be enforceable. None of the

other provisions need be reformed to satisfy Plaintiff’s claim.

Given that narrow question, the jury must only decide whether

the change from “promises to lend” to “has lent” would correctly

memorialize the intent of both of the parties. In this posture, in-

terpreting the facts most favorably to Plaintiff, it is clear that a

reasonable jury could conclude that both parties intended to me-

morialize a past loan. Defendant stated in her deposition, “I did

not expect that they would be giving me money in the future,”

and again, “As I’ve said before, I didn’t expect they would lend it

in the future.” (Dep. of Ada S. Cooper at 224:12-16, 240:22-

241:7.) Emails from Plaintiff, Defendant, and Plaintiff’s husband

all suggest they understood the agreement to be retrospective,

including an email from Defendant to her lawyer in which she

identified the sum (which she had changed before sending) to

memorialize a previous loan. (Def.’s Rule 56.1 Statement (“Def.’s

56.1”) (Dkt. 54-23) ¶ 49; Ex. E (Dkt. 54-7) at 3; Ex. I (Dkt. 54-

11); Dkt. 57, at 7.) Defendant never sought any money from

Plaintiff after signing the agreement, and Plaintiff never at-

tempted to provide any money to Defendant after signing the

agreement.

From this evidence the court easily concludes that a reasonable

jury could find the parties intended their agreement to memori-

alize a past loan. Defendant’s motion for summary judgment on

the reformation claim is therefore DENIED.

2. The Equitable Claims

Although the court has denied Defendant’s motion to dismiss and

motion for summary judgment on Plaintiff’s reformation claim,

the court has not been asked to actually grant reformation of the

Unenforceable Agreement. Even if Plaintiff were to file her own

motion for summary judgment, and the court were to grant it,

there would still remain questions of (1) whether that reformed

contract is enforceable, and (2) whether the reformed contract

was breached. Perhaps cognizant of the uncertainty of these is-

sues, Plaintiff pled several alternative equitable claims of

promissory estoppel, unjust enrichment, and money had and re-

ceived. They could be tried together with the reformation claim.

Defendant moves to dismiss each claim, or again in the alterna-

tive for summary judgment.

a. Promissory Estoppel

i. Motion to Dismiss

Defendant first moves to dismiss Plaintiff’s promissory estoppel

claim. She argues that Plaintiff’s claim (1) does not allege suffi-

cient facts; (2) is barred by the statute of frauds and fails to allege

an “unconscionable injury”; and (3) is barred by the statute of

limitations.

New York law requires a claim for promissory estoppel to state

three elements: (1) A clear and unambiguous promise; (2) rea-

sonable and foreseeable reliance on that promise; and (3) injury

to the relying party as a result of the reliance. See R.R. Donnelley

& Sons Co. v. Marino, No. 20-CV-06722 (EAW), 2021 WL

4441515, at *5 (W.D.N.Y. Sept. 28, 2021). “A plaintiff may uti-

lize the doctrine of promissory estoppel in two situations: (1) to

enforce a promise in the absence of bargained for consideration;

and (2) to provide relief to a party where the contract is rendered

unenforceable by operation of the Statute of Frauds.” Id.

Plaintiff alleges four promises that might give rise to a promissory

estoppel claim: a 2015 promise to repay $414,300 for loans pre-

viously extended, as well as three individual promises that

Defendant made to repay $149,700, $87,000, and $185,000 in

exchange for loans in those amounts from Plaintiff. There are

thus two parallel theories of Plaintiff’s promissory estoppel claim:

one based on an alleged oral agreement that parallels the terms

of the written Unenforceable Agreement of 2015, and the other

based on the original three individual promises which the Unen-

forceable Agreement sought to consolidate and memorialize. The

court examines each in turn.

First, the court finds that Plaintiff has successfully pleaded the

three elements of a promissory estoppel claim under her first the-

ory of her case. As to the first element, Plaintiff claims that

Defendant made a clear and unambiguous promise to repay

$414,300 by January 2018. (Am. Compl. ¶¶ 2, 43, 67.) As to the

second prong, Plaintiff next asserts that she reasonably relied

upon this promise both by lending the money to Defendant in the

first place, and by forbearing from seeking immediate repayment

of funds previously conferred. (Id. ¶ 68.) Finally, Plaintiff con-

tends that the resulting loss of this substantial sum of money

constitutes her injury. While a jury may ultimately reject these

claims, and while this court may still find them so unsupported

by facts as to fail the standard of summary judgment, they at least

survive Defendant’s motion to dismiss.

Second, the court similarly finds that Plaintiff has sufficiently

stated a claim on her second theory as well. Plaintiff has identi-

fied each of the three individual promises allegedly made by

Defendant as a promise to repay the Marital Loan in December

of 2013, a promise to repay the $87,000 loan made in February

2014, and a promise to repay the $187,000 made in October

2014. (Id. ¶¶ 17, 19, 24.) Plaintiff alleges each of these promises

were accompanied by an understanding that the money would

be paid from Defendant’s share of her inheritance from their fa-

ther’s estate. (Id. ¶¶ 21, 38.) To meet the second prong of the

promissory estoppel analysis, Plaintiff once again asserts that she

reasonably relied upon these three promises by extending the

monies in the first place, and by forbearing from seeking imme-

diate repayment. (Id. ¶ 68; see also Dep. of Edith Cooper at 49:10-

21, 50:7-12, 53:3-9, 71:21-73:7.) Finally, Plaintiff again con-

tends that the resulting loss of this sum constitutes her injury. (Id.

¶ 69.)

Because Plaintiff addressed each of the three elements of the

promissory estoppel claims and plausibly alleged facts that, if

true, would satisfy those elements, Defendant’s motion to dismiss

is DENIED on the basis of alleging sufficient facts.

ii. Motion for Summary

Judgment

The court next examines each of Plaintiff’s theories as to whether

there are facts sufficiently in dispute to survive Defendant’s mo-

tion for summary judgement.

On the first theory, the court finds that no reasonable jury could

conclude Plaintiff reasonably relied upon Defendant’s alleged

promise to repay a combined sum of $414,300. The facts are un-

disputed that Defendant’s alleged promise, made in late 2014 or

in 2015, could only have been intended as a memorialization of

past promises, and was not then relied upon by Plaintiff in loan-

ing any additional funds. (Pl.’s 56.1 ¶¶ 45, 49; Dep. of Ada S.

Cooper at 224:12-16, 240:22-241:7.) The only action that Plain-

tiff is alleged to have undertaken in reliance on this promise

(divorced from the previous three alleged promises to repay the

constituent loans at the time they were extended) is that of for-

bearing from seeking immediate repayment of the already-made

loans. (Id. ¶ 68.) But Plaintiff has stated, and Defendant agrees,

that the two agreed that Defendant would repay the loans out of

the proceeds from their father’s estate, and their father had not

yet died. (Id. ¶¶ 21, 38; see also Pl.’s 56.1 ¶ 27.) Therefore, by the

terms of the agreement that Plaintiff describes in the Amended

Complaint, any forbearance was illusory. She simply did not have

the right or ability to seek the “immediate repayment” she alleges

to have foregone. Without any reasonable reliance, Plaintiff’s first

theory fails and the court would award summary judgment.

Alternatively, however, Plaintiff’s second theory alleges that De-

fendant made three individual promises to repay each of the

three constituent loan amounts before those loans were extended

(in 2002, February 2014, and October 2014, respectively) and

that Plaintiff then loaned money to Defendant in reliance on

those promises. (Am. Compl. ¶¶ 17, 19, 24.) The court therefore

examines the undisputed facts surrounding the three amounts

(first the “Marital Loan” of $149,700, and then the two subse-

quent alleged loans of $87,000 and $185,000) individually,

separated as they are by time and circumstance.

For the Marital Loan, Plaintiff adduces sufficient facts to permit

a jury to find that Defendant made a promise to repay this loan.

Defendant signed a promissory note for the loan. (Pl.’s 56.1

¶ 17.) Defendant was ordered by the Supreme Court of the State

of New York to pay the $149,700 sum to Plaintiff. (Ex. G (Dkt.

54-9) at 80.) And Defendant has acknowledged the loan numer-

ous times in the evidence and in her deposition. (See, e.g., Ex. T

(Dkt. 54-21); Decl. of Ada S. Cooper at ¶¶ 11, 19, 49; Dep. of Ada

S. Cooper (Dkt. 55-2) at 38:12-15.)3 As to this amount then, the

court DENIES Defendant’s motion for summary judgment.

3 If anything, the strength of the factual record raises a separate but related

question as to whether Plaintiff’s claim for promissory estoppel can survive

its own persuasive evidence, because claims in quasi-contract generally

cannot coexist with an express, valid contract. See Karmilowicz v. Hartford

Fin. Servs. Group, 494 Fed. Appx. 153, 158. The court nonetheless con-

cludes that it can, because promissory estoppel may be pled in the

alternative where the validity of the contract is disputed. Defendant has

attempted to cast doubt on the validity of the Marital Loan contract for

$149,700, arguing that, “This obligation is legally unenforceable, does not

belong in a lawsuit against Defendant, and otherwise should be dismissed.”

(Pl. Mem. of Law (Dkt. 54) at 7.). Defendant cannot assert the contract is

unenforceable on one hand and that the claim for promissory estoppel

should be dismissed because of the existence of a valid contract on the

other. Since Defendant has reserved her right to contest the Marital Loan,

Turning to the two other sums of $87,000 and $185,000, Plain-

tiff presents an email exchange between Defendant and Plaintiff’s

husband between May 1 and May 2, 2014, at the time when

Plaintiff extended the $87,000 sum to Defendant. In these

emails, Defendant acknowledges that “the balance on the other

loan, according to the court’s decision at least, is $149,000.” (Ex.

T (Dkt. 54-21) at 1 (emphasis added).) Plaintiff points repeatedly

to this email as an acknowledgement that Defendant accepted

the $87,000 as a loan and not a gift. Although other explanations

exist for this use of language by Defendant, a rational trier of fact

might accept Plaintiff’s version of the facts.4

Additionally, Plaintiff argues that the Unenforceable Agreement

itself, as well as the fact of its negotiation and partial perfor-

mance, are the most compelling evidence that Defendant had

previously promised to repay the money extended to her. De-

fendant did not object to (and in fact negotiated for) the total of

$414,300 enumerated in the agreement, knowing that it re-

flected the (slightly reduced) sum of the $87,000 and $185,000

she had been extended in 2014. Indeed, the agreement was con-

structed specifically to avoid the appearance of any of these sums

being construed as “gifts.” (Def.’s Rule 56.1 Statement Response

¶¶ 34-40; see also Ex. I (Dkt. 54-11) at 3.) After consulting with

both a lawyer and an accountant, and being assured by both (al-

beit mistakenly) that the agreement would be effective, she

signed it. (Ex. E (Dkt. 54-7) at 1-2; see also Def.’s 56.1 ¶¶ 49-50.)

Defendant made at least one interest payment on the full

$414,300 total and asserts that she made others as well. (Def.’s

Plaintiff must also be permitted to preserve her promissory estoppel claim

as an alternative to an enforcement of the loan obligation.

4 To begin the email exchange, Plaintiff’s husband said, “Ada, Edith and I

just wired you $20,000 to cover your father’s expenses in the short term.

Our understanding is that this is a loan against your father’s estate.” (Ex. T

(Dkt. 54-21) at 1.) It could have been this loan, and not the sum of

$87,000, which Defendant implicitly recognized in her response.

56.1 ¶¶ 51-64.) A rational trier of fact might well review these

facts and be persuaded that only a person who had actually ac-

cepted $414,300 in loans and had promised to repay that

amount previously would behave in this manner, signing loan

agreements and making interest payments, particularly if that

person had a degree from Harvard Law School. Defendant pre-

sents an alternative view of the evidence, namely that her actions

simply stem from an effort to avoid conflict either between her-

self and Plaintiff or between Plaintiff and Plaintiff’s husband.

(Def.’s 56.1 ¶¶ 47, 58.) This dispute over how to interpret the

evidence is the responsibility of a trier of fact and should not be

resolved on a motion for summary judgement. Thus, as to the

second and third amounts, the court DENIES Defendant’s motion

for summary judgment.

In summary, the court concludes that Plaintiff’s promissory es-

toppel claim can survive only when rooted in the three individual

promises to repay the constituent loans that Plaintiff claims to

have extended from 2002-2014. But the promissory estoppel

claim fails when it is based on Defendant’s singular promise to

repay $414,300 previously loaned. The facts on the individual

promises being in sufficient genuine dispute, Defendant’s motion

for summary judgment is DENIED.

iii. Affirmative Defenses

Though the court has thus far declined to grant Defendant’s mo-

tion to dismiss the promissory estoppel claims, and has denied

Defendant’s motion for summary judgment on them, it must still

consider Defendant’s affirmative defenses arising under the stat-

ute of frauds and statute of limitations.

Statute of Frauds

The applicable New York statute of frauds provides that

Every agreement, promise or undertaking is void, unless

it or some note or memorandum thereof be in writing,

and subscribed by the party to be charged therewith, or

by his lawful agent, if such agreement, promise or un-

dertaking . . . [b]y its terms is not to be performed within

one year from the making thereof or the performance of

which is not to be completed before the end of a lifetime.

G.O.L. § 5-701(a).

Courts have repeatedly held that “this statute must be construed

so that its effect is limited to those contracts which, by their

terms, cannot possibly be fully performed within one year.” Ku-

bin v. Miller, 801 F. Supp. 1101, 1120 (S.D.N.Y. 1992) (citing

D&N Boening, Inc. v. Kirsch Beverages, Inc., 63 N.Y. 2d 449, 454

(1976)). The statute of frauds governs loans which the borrower

does not have a legal right to repay within one year, agreements

which one party can terminate but the other can escape only

through breach, and agreements which remain in place in perpe-

tuity unless they are breached. “The requirement means that full

performance by all parties must be possible within a year, but it

does not matter how improbable it may be that performance will

actually occur within that time frame.” Cacchillo v. Insmed, Inc.,

551 Fed. Appx. 592, 594-95 (2d Cir. 2014).

With this one-year limit for oral agreements in mind, Defendant

first argues that “according to plaintiff the parties’ oral agreement

contemplated a three-year term with annual interest payments.

The oral agreement was, therefore, within the scope of, and ren-

dered void by, G.O.L. § 5-701(a).” (Def.’s Mem. of Law (Dkt. 54-

1) at 10.) The court concludes to the contrary. The Unenforcea-

ble Agreement (and any accompanying oral agreement to its

same effect that was not committed to writing) cannot run afoul

of the statute of frauds for this reason because it expressly con-

templates the possibility of repayment within one year, or even

immediate repayment. Paragraph 4 of the document provides,

“At any time while not in default under this Agreement, Borrower

may pay to Lender the outstanding balance then owing under

this Agreement without bonus or penalty.” (Loan Agreement at

1.) While the exercise of such a repayment option may have been

improbable, it was at least possible.

As the court discussed in denying summary judgment, however,

Plaintiff’s promissory estoppel claim can proceed only if it rests

on the three individual promises Defendant allegedly made to

Plaintiff to repay the Marital Loan and the subsequent loans of

$87,000 and $185,000. The Marital Loan is in writing in the form

of a promissory note, and thus does not violate the statute. Nei-

ther Defendant nor Plaintiff allege that the promises to repay the

sums of $87,000 and $185,000 were accompanied by any prohi-

bition for repayment within one year, and so they do not violate

the statute for the reasons Defendant raises.

Nevertheless, the final provision of the statute of frauds requires

an agreement to be in writing if it “is not to be completed before

the end of a lifetime.” G.O.L. § 5-701(a). This lifetime does not

need to be that of either the promisor or promisee. Indeed, in

Meltzer v. Koenigsberg, 302 N.Y. 523 (1951), the New York Court

of Appeals found that a promise between sisters that could not

be fulfilled until their father’s death fell directly within this pro-

vision of New York’s statute of frauds. Because neither the

alleged promise to repay the $87,000 nor the $185,000 loans

were in writing, and the parties’ agreement, which they repeat-

edly discussed and which they carefully preserved and reflected

in the Unenforceable Agreement, was not to be completed before

the end of their father’s lifetime, both promises fall within the

statute of frauds.

The statute requires an additional step, however, before Plain-

tiff’s equitable claims may be dismissed. Under New York law,

“[a] claim for promissory estoppel may not be maintained under

New York law where the alternative claim for breach of contract

is barred by the Statute of Frauds, unless the circumstances make

it unconscionable to deny the promise upon which the plaintiff

relied.” United Magazine Co. v. Murdoch Magazines Distrib., 146

F. Supp. 2d 385, 405 (S.D.N.Y. 2001). Reliance or expectations

damages associated with non-performance of a contract do not

amount to an “unconscionable injury.” Merex A.G. v. Fairchild

Weston Sys., 29 F.3d 821, 826 (2nd Cir. 1994). Rather, an un-

conscionable injury is one in which the party protected by the

statute of frauds,

by inducing or permitting without remonstrance an-

other party to the agreement to do acts, pursuant to and

in reliance upon the agreement, to such an extent and

so substantial in quality as to irremediably alter his situ-

ation and make the interposition of the statute against

performance a fraud.

Philo Smith & Co. v. Uslife Corp., 554 F.2d 34, 36 (2d Cir. 1977).

Plaintiff does not allege that she was induced or permitted to per-

form to such an extent and quality that her situation was

irremediably altered. Thus, her injury is not unconscionable and

her promissory estoppel claims are barred by the statute of

frauds, except for the $149,700 Marital Loan which is in writing.

Defendant’s motion to dismiss Plaintiff’s equitable claims as to

the $87,000 and $185,000 sums, then, is GRANTED.

Statute of Limitations

That leaves Defendant’s remaining affirmative defense, the stat-

ute of limitations, now applicable only to the $147,000 Marital

Loan.

In New York, “the statute of limitations for a promissory estoppel

claim is six years and begins to run upon breach of the promise.”

Baker v. Bank of America, N.A., 2016 WL 9409022 (S.D.N.Y. Oct.

31, 2016). Here, a New York Supreme Court found that on April

14, 2013, “the entire balance [of the Marital Loan] became due

in full.” (Ex. G (Dkt. 54-9) at 79.) However, the parties agreed

that Defendant would repay that sum from the estate of their fa-

ther. (Am. Compl. ¶ 21.) Therefore, the earliest the promise

could have been breached was upon his death in 2016, which is

well within the six-year limitations period. (Pl.’s 56.1 ¶ 59.) De-

fendant’s motion to dismiss the remaining promissory estoppel

claim is therefore DENIED.

b. Unjust Enrichment

i. Motion to Dismiss

To state a claim for unjust enrichment, a plaintiff must plausibly

allege that “(1) the other party was enriched, (2) at the other

party’s expense, and (3) that it is against equity and good con-

science to permit the other party to retain what is sought to be

recovered.” Werner v. Selene Fin., LLC, No. 17-CV-06514 (NSR),

2019 WL 1316465, at *9 (S.D.N.Y. Mar. 22, 2019). Such claims,

however, are only available “in unusual situations when, though

the defendant has not breached a contract nor committed a rec-

ognized tort, circumstances create an equitable obligation

running from the defendant to the plaintiff.” Id. The New York

Court of Appeals has elaborated accordingly:

The essential inquiry in any action for unjust enrichment

or restitution is whether it is against equity and good

conscience to permit the defendant to retain what is

sought to be recovered. Such a claim is undoubtedly eq-

uitable and depends upon broad considerations of

equity and justice. Generally, courts will look to see if a

benefit has been conferred on the defendant under mis-

take of fact or law, if the benefit still remains with the

defendant, if there has been otherwise a change of posi-

tion by the defendant, and whether the defendant’s

conduct was tortious or fraudulent.

Paramount Film Distrib. Corp. v. State, 30 N.Y. 2d 415, 421

(1972).

Plaintiff seeks to apply this framework to Defendant in order to

recover on a promise to repay a loan. Plaintiff argues that unjust

enrichment has been employed by courts in the context of unpaid

loans between businesses and individuals operating at arm’s

length in the marketplace. See, e.g., Spesinskis v. Feldman, No. 19-

CV-1562 (BMC), 2019 WL 3216553, at *3-4 (E.D.N.Y. 2019);

Maya NY, LLC v. Hagler, 106 A.D.3d 583, 584-85 (1st Dep’t

2013); Gillon v. Traina, 70 A.D.3d 1443, 1444 (4th Dep’t 2010).

But these cases merely show that a debtor-creditor relationship

does not preclude an unjust enrichment claim. Even in such a con-

text, unjust enrichment requires some extraordinary

circumstance (usually a death or accident) or the blurring of cor-

porate and personal identities. Those circumstances must have

then led to a mistake of fact or law. Finally, an injustice must

have resulted that a court sitting in equity can correct.

Plaintiff, however, does not allege that a benefit was conferred

on the Defendant because of any mistake, whether of fact or law.

Instead, she claims, citing cases involving agreements between

corporations and investment banks, that “there is no such thing

as free money. Having acknowledged that it received the funds,

[Defendant] at some point had to pay them back.” (Pl. Mem. of

Law at 16.) Somehow Plaintiff ignores that, between sisters,

there very often is such a thing as free money: gifts.

Moreover, Plaintiff fails to allege some sort of special circum-

stance of confusion or mistake that would lead the court to

believe the funds were something other than either an inten-

tional loan or a freely given gift. Indeed, in this case there has

been such a substantial change in position by the Defendant in

reliance upon the funds received from Plaintiff that, if anything,

the strongest case in equity and good conscience would be to per-

mit Defendant to keep them, rather than return them to Plaintiff.

Defendant used one loan to purchase a home, another to settle

her acrimonious divorce, and a third to extricate herself from an

otherwise crushing lawsuit that she could not have settled on her

own. (Pl.’s 56.1 ¶¶ 17, 22.) The court declines to endorse Plain-

tiff’s assertion that equity and good conscience so powerfully

forbid her sister from retaining these benefits that an extraordi-

nary equitable remedy, generally reserved for egregious frauds,

should issue from this court.

The court can only conclude that if these funds were not ex-

tended as loans (as Plaintiff asserts), then they were given as gifts

(as Defendant asserts). Either way: they were not mistakenly

conferred under any extraordinary circumstance that might war-

rant an equitable intervention of the court to reverse an unjust

enrichment.

Because the court finds that the Amended Complaint thus fails to

state a claim for unjust enrichment, Defendant’s motion to dis-

miss that count is GRANTED. The court need not reach

Defendant’s affirmative defenses or the alternative motion for

summary judgment on this claim.

c. Money Had and Received

i. Motion to Dismiss

To state a claim for money had and received, a plaintiff must

plausibly allege that “(1) defendant received money belonging to

plaintiff; (2) defendant benefitted from the receipt of money; and

(3) under principles of equity and good conscience, defendant

should not be permitted to keep the money.” Panix Promotions,

Ltd. v. Lewis, No. 01-CV-2709 (HB), 2002 WL 122302, at *2

(S.D.N.Y. Jan. 22, 2002). Traditionally, the remedy has been

available

if one man has obtained money from another, through

the medium of oppression, imposition, extortion, or de-

ceit, or by the commission of a trespass. Further, such an

action has been permitted where plaintiff has paid

money by mistake, money has been collected for an ille-

gal tax or assessment, or property is erroneously taken

or withheld by a public official.

Id. at 2.

Plaintiff in this case does not allege oppression, imposition, ex-

tortion, deceit, trespass, mistake, coercion, erroneous

withholding, or any other comparable or analogous circumstance

which might place this case in the realm of money had and re-

ceived. Instead, Plaintiff alleges that Defendant promised to

repay several loans; that plaintiff intentionally and freely relied

upon those promises in extending the loans; and that Defendant

has not repaid them. That is an ordinary claim, not an extraordi-

nary one.

Like unjust enrichment, the doctrine of money had and received

is not a weapon of credit collection. See United Republic Ins. Co.

v. Chase Manhattan Bank, 168 F. Supp. 2d 8, 20 (N.D.N.Y.

2001) (finding that plaintiff had no possessory interest in money

that was a loan freely given to defendant who failed to repay).

Although the existence of a loan agreement between the parties

does not preclude a claim for money had and received, neither

does the bare receipt of money and lack of repayment justify one.

Something more must be present to distinguish such a transac-

tion from a gift and invite the equitable intervention of the court.

That something is missing here.

Defendant’s motion to dismiss the money had received count is

therefore GRANTED. The court need not reach Defendant’s af-

firmative defenses or the alternative motion for summary

judgment on the claim.

III. CONCLUSION

To summarize: On the reformation claim, Defendant’s motion to

dismiss is DENIED. Defendant’s motion for summary judgment

as to the full amount of the $414,300 “Unenforceable Agree-

ment” is also DENIED.

Defendant’s motions to dismiss the unjust enrichment and money

had and received claims are both GRANTED.

Defendant’s motions to dismiss the promissory estoppel claims as

to the sums of $87,000 and $185,000 are GRANTED. The motion

to dismiss the promissory estoppel claim for the $147,000 Mari- □

tal Loan is DENIED. Defendant’s motion for summary judgment

on the promissory estoppel claims is DENIED in its entirety.

The following claims may therefore proceed to trial: reformation

of the entire written loan agreement; and, in the alternative,

promissory estoppel as to the $147,000 Marital Loan.

The parties are DIRECTED to contact Magistrate Judge Steven

Tiscione to propose a pretrial order.

SO ORDERED. .

Dated: Brooklyn, New York

July 12, 2022

s/Nicholas G. Garaufis

NICHOLAS G. GARAUFIS

United States District Judge

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