Plaintiffs are former founding members of nonparty Havens, Inc. (Havens), a resort destination club in the business of acquiring vacation properties to be used by the club members. Funding for these property acquisitions was to be generated principally through the financial contributions of the founding members. To become founding members, plaintiffs were required to sign a membership agreement, and to pay $150,000 in membership dues. A portion of the membership dues was to be held as a deposit in escrow. Defendant Katten Muchin Rosenman LLP, sued here as Katten Muchin Zavis & Roseman LLP (Katten), acted as escrow agent for the escrow account. In 2006, Havens failed as a going concern, and is now apparently without funds to pay damages suffered by plaintiffs. Plaintiffs then brought this action against Katten seeking return of their deposits, and alleging wrongful release of escrowed funds and furtherance of fraud by the [*2]club's sponsors.Katten now moves for summary judgment dismissing the amended complaint ^[FN1] on the ground that it fails to state a cause of action, and is contradicted by clear and unambiguous documentary evidence.

For the reasons set forth below, Katten's motion is granted.

Havens was a start-up vacation destination resort company. It intended to limit membership to 400, and to acquire individual residence units like houses or individual apartments in desirable vacation areas. Membership in Havens entitled the member to a certain number of days annually at a certain number of Havens resort properties (Aff. of Merril Mironer, ¶ 2).

Members, like plaintiffs, were not shareholders and acquired no equity interest upon joining Havens. Rather, the membership deposits paid by Havens members, including plaintiffs, were in the nature of membership fees (id.).

Membership in Havens was governed by three documents: a Member Application, a Membership Handbook (sometimes referred to as the Membership Plan), and a Deposit Repayment Bond Certificate. The Member Application refers to these three documents (collectively, the Membership Agreement Documents or the Membership Agreement) as the "entire agreement" between Havens and each member (Member Application, ¶ 7 [Aff. of Ted Poretz, Exh D]).

The Membership Agreement Documents address the member deposits, the refund of which is what plaintiffs seek in this action. None of the Membership Agreement Documents refers to Katten, the Escrow Agreement, or the existence of an escrow account.

The Member Application has two provisions relating to membership deposits. In section 2, the Member Application provides that deposits may be used "to fund the acquisition of real estate," as well as to pay for "capital improvements to real estate, including furnishings" (Member Application, § 2). Section 6 provides that upon termination of a member's interest in Havens, the member is entitled, under certain circumstances, to the refund of the deposit "in accordance with the terms and conditions of the Membership Handbook" (id., ¶ 6).

The Membership Handbook addresses member deposits only in section 7.2, and provides that upon resignation of a member, the member shall be placed on a waiting list for the refund of a member's deposit, if the member is otherwise eligible for refund (Membership Handbook, § 7.2 [Poretz Aff., Exh E]).

The Deposit Repayment Bond Certificate provides only that membership deposits are subject to refund 30 years from the date of the Certificate, and "pursuant to and subject to the terms and conditions of the Membership Agreement and the Membership Plan" (Certificate, ¶ 1 [Poretz Aff., Exh F]). The Deposit Repayment Bond Certificate provides expressly that the refund right "is backed by and subject to the availability of the assets of [Havens]" (id., ¶ 2).

In late July 2004, Katten was asked to draft an escrow agreement for Havens to provide to members or prospective members, and it was later asked to draft two other escrow agreements (Mironer Aff., ¶ 3).

The amended complaint attaches three different versions of the escrow agreement. The three versions of the escrow agreement are dated October 22, 2004, November 8, 2004 and February 1, 2005. The October version is identical to the February 1, 2005 version, except for the fact that the [*3]February 1, 2005 escrow agreement included two additional Authorized Purposes, one of which was the leasing of vacation properties, whereas the earlier version did not allow for leasing (Mironer Aff., ¶ 22). Both versions allowed escrow funds to be disbursed for purposes ancillary but "directly related" to an express Authorized Purpose (id., ¶ 10).

None of the plaintiffs paid any deposit money to Katten prior to the effective date of the February 1, 2005 escrow agreement (id., ¶¶ 19-20). Katten contends that there should be no dispute that each plaintiff's deposit was governed by the terms of the escrow agreement in effect at the time the payment was made, and indeed, plaintiffs agree that the terms of the February 1, 2005 escrow agreement control the outcome of this dispute (see Transcript of 10/5/07 Oral Argument, at 16).

Each of the escrow agreements is an agreement between Katten and Havens, whereby Katten agreed to (1) hold deposits sent to it by Havens members, and (2) to disburse monies it was holding only at Havens' specific request, for purposes specifically authorized by the escrow agreement (Mironer Aff., ¶ 6). The three escrow agreements are identical in most respects.

The October 22, 2004 escrow agreement (the First Escrow Agreement [Mironer Aff., Exh A]) is an agreement only between Havens and Katten. It requires Havens to deliver to Katten 80% of the membership fee paid by each "Founding Member" of Havens, to be held in escrow and disbursed to Havens only for purposes specified in section 3 of the First Escrow Agreement.

Like all of the escrow agreements, the First Escrow Agreement highlights the fact that Katten's role as escrow agent "is solely ministerial and [Katten] shall have no duties or obligations other than those expressly imposed on it herein" (First Escrow Agreement, § 2.2 [emphasis added]). Katten's only obligation was to disburse funds at Havens' request for any expenditure allowed by the escrow agreement. Therefore, Havens and Katten agreed that Katten:

may rely upon any paper or other document which may be submitted to it in connection with its duties hereunder and which it believes to be genuine and to have been signed or presented by the proper party or parties and shall have no liability or responsibility thereto with respect to the form, execution or validity thereof. [Katten] shall not be liable for any act which it may do or omit to do, except in the case of its own bad faith or negligence.

Id.

Section 3 of the First Escrow Agreement instructed Katten to release funds upon the presentation by Havens of a copy of "binding, executed agreements that require [Havens] or any affiliated entity controlled by [Havens] to (i) purchase vacation residences or resort facilities (the Properties'); (ii) renovate Properties; (iii) purchase furnishings for Properties; or (iv) incur expenses directly related to any of the foregoing" (id., § 3).

Accordingly, as escrow agent, Katten's obligation before disbursing monies at Havens' request was only to ascertain that it had been presented with a document which "it believes to be genuine and to have been signed or presented by the proper party" and which, on its face, was "binding" and "executed" and for one of the purposes set forth in section 3. In addition, the First Escrow Agreement made clear that Katten "shall have no liability with respect to the form, execution or validity" of any such document, and further provided that Katten "shall not be liable for any act which it may do or omit to do, except in the case of its own bad faith or gross negligence."

Finally, the First Escrow Agreement contains Havens' agreement that it will advise all [*4]Founding Members whose deposits are to be held in escrow, that Katten "represents the Company from time to time on various matters" (id., § 8).

The November 8, 2004 escrow agreement (the Second Escrow Agreement [Mironer Aff., Exh B]), by its terms, supplemented but did not replace the First Escrow Agreement (see Second Escrow Agreement, Third Recital). The Second Escrow Agreement contained the same exculpatory language as the First Escrow Agreement: Katten's role was "solely ministerial," it had no obligation to investigate the provenance of any document presented to it, as long as it believed the document to be "genuine and to have been signed or presented by the proper party or parties," and which constituted a "binding, executed purchase agreement that requires [Havens] ... to purchase a vacation residence or resort facility." As with the First Escrow Agreement, Katten was liable only for bad faith or gross negligence, and Havens was required to make sure that any Founding Member submitting a deposit under the Second Escrow Agreement was aware that Katten was Havens' occasional counsel on other matters.

From the time that the First Escrow Agreement was executed, on October 22, 2004, until the Third Escrow Agreement was executed on February 1, 2005, Katten received no money from plaintiffs (Mironer Aff., ¶ 19). During the same period, Katten disbursed only $129,780, which was part of the cost of the purchase of a vacation unit in Telluride, Colorado (id.).

The February 1, 2005 escrow agreement (the Third Escrow Agreement [Mironer Aff., Exh C]) became effective on February 1, 2005, and it is the escrow agreement that governs the deposits of all plaintiffs.

The Third Escrow Agreement is similar to the First. It provides, as the First (and Second) Escrow Agreement does, that Katten's role as escrow agent "is solely ministerial," provides that Katten "shall have no duties or obligations other than those expressly imposed on it herein," agrees that Katten "may rely upon any paper or other document which may be submitted to it ... which it believes to be genuine and to have been signed or presented by the proper party or parties," requires Katten to release sums from escrow on receipt of "binding, executed agreements" that require Havens to enter into one of six specifically enumerated kinds of transactions, and provides that Katten shall not be liable for acts of omission unless performed with "bad faith or gross negligence." As with the two other escrow agreements, Havens is obligated to notify members who deposit money in escrow that Katten is its counsel on other matters.

The only substantive difference between the Third Escrow Agreement and the First Escrow Agreement is the Third's expanded list of transactions that can be funded from the escrow fund maintained by Katten. Where the First Escrow Agreement provided for distributions from escrow to "purchase" vacation homes or resort facilities, and for purposes "directly related" to a purchase, Section 3 of the Third Escrow Agreement also allows escrow funds to be used where Havens chooses to "(vi) lease Properties." The Third Escrow Agreement continues to authorize escrow funds to be used for "expenses directly related to any of the foregoing," which includes leasing.

The first plaintiff to send a member deposit to Katten was Jess Mogul, whose payment was received on March 14, 2005 (Mironer Aff., ¶ 4). The last depositing plaintiffs were Janet Loeb and her brother, David Goldrath, whose payments were received on June 29, 2005 (id.). Over the life of Katten's service as escrow agent, it received a total of $1,636,246.42, including interest, from 15 separate depositors. Deposits were made into the escrow account from December 15, 2004 to September 30, 2005. Of this amount, $480,000 came from plaintiffs, commencing with Mogul's March 14, 2005 deposit and ending with the deposits made on June 29, 2005 by Goldrath and Loeb [*5](id., ¶ 4).

Katten asserts that, at Havens' request, it disbursed all of the escrow deposits in accordance with the purposes permitted by the applicable escrow agreement, and each disbursement was accompanied by the requisite documentation (id., ¶ 5). By October 6, 2005, the escrow fund was essentially exhausted, leaving only a small amount of accrued interest that by April 17, 2006 (when the escrow fund was emptied) had grown to $2,103.53 (id., ¶ 34). Section 4 of the Third Escrow Agreement provides that Katten is released upon its "delivery of the entire amount of the Escrow Fund in accordance with the provisions of this Agreement," an event which took place no later than April 17, 2006 (id.).

Plaintiffs contend that Katten is liable to reimburse the deposits they paid to Havens. However, plaintiffs do not dispute the authenticity of the documents that govern this dispute: the Membership Documents, the escrow agreements, and the documents on which Katten based all of the disbursements from the Escrow (see Plaintiffs' Counter-Statement of Material Facts and Genuine Issues of Material Fact to be Tried, ¶¶ 1-10).

As set forth below, the clear and unambiguous documentary evidence establishes that all monies that Katten disbursed from escrow was for an Authorized Purpose, and in each case after receiving documents demonstrating that the proposed disbursement was authorized by the Third Escrow Agreement. As such, Katten's motion for summary judgment is granted.

CPLR 3212 (b) provides that summary judgment in favor of a defendant "shall be granted if, upon all the papers and proof submitted, the ... defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party." Where, as here, "the intent of the parties can be determined from the face of the agreement, interpretation is a matter of law and the case is ripe for summary judgment" (see e.g. JRK Franklin, LLC v 164 E. 87th Street LLC, 13 Misc 3d 1239 A], 2006 NY Slip Op 52170[U], * 4 [Sup Ct, NY County 2006] [citation omitted]). Moreover, where, as here, the record "clearly and unambiguously" demonstrates that a plaintiffs' claims are without merit, summary judgment should be granted in favor of the defendant (see e.g. F. Garofalo Elec. Co. v New York Univ., 270 AD2d 76, 80 [1st Dept], lv dismissed 95 NY2d 825 [2000]).

Plaintiffs contend, in the First Cause of Action for Breach of Contract, that they are third-party beneficiaries of the escrow agreements. "A beneficiary's rights, like the rights of the promisee, are absolutely defined by the terms of the contract. To the same extent that third parties can take advantage of beneficial and favorable terms of the contract, they are also bound by any in adequacies of the contract" (Diamond Lease [USA], Inc. v Travelers Indem. Co., 6 Misc 3d 1013[A], 2004 NY Slip Op 51786[U], * 2 [Sup Ct, NY County 2004] [internal quotation marks and citations omitted]). Therefore, as alleged third-party beneficiaries of the Third Escrow Agreement, plaintiffs are bound by all of its terms, not just the provisions that allow them to assert their claims.

The Third Escrow Agreement, which plaintiffs seek to enforce as if they were original parties to it, releases Katten "from all responsibility and liability ... upon [Katten's] delivery of the entire amount of the Escrow Fund in accordance with the terms of the [Escrow Agreement]" (Third Escrow Agreement, § 4). There is no dispute that Katten delivered the entire amount of the escrow fund to Havens, at its request, and in accordance with the terms of the Third Escrow Agreement. Thus, in the event that they were third-party beneficiaries of the Third Escrow Agreement, plaintiffs have released Katten "from all responsibility and liability."

Nevertheless, plaintiffs allege that "[Katten's] wrongful payments out of the Escrow ... [*6]constituted breaches of [Katten's] contractual duties to plaintiffs as third-party beneficiaries" (Amended Complaint, ¶ 53). Accepting, arguendo, for the purposes of this motion that plaintiffs are third-party beneficiaries of the Third Escrow Agreement, it is clear that Katten did not breach any contractual duty it would have owed to plaintiffs because there were no "wrongful payments." The documentary evidence submitted by Katten unambiguously demonstrates that Katten strictly complied with the terms of the Third Escrow Agreement, and disbursed funds only for Authorized Purposes and with appropriate documentation.

An escrow agreement is a contract (see Animalfeeds Intl. Inc. v Banco Espirito Santo e Comercial de Lisboa, 101 Misc 2d 379 [Sup Ct, NY County 1979]). It necessarily follows that plaintiffs cannot impose upon Katten any obligations in addition to its "limited duties under the express terms of its contract" (see Timmins v Tishman Constr. Corp., 9 AD3d 62, 68 [1st Dept], lv dismissed 4 NY3d 739 [2004]; see e.g. Continental Ins. Co. v 115-123 W. 29th St. Owners Corp., 275 AD2d 604, 605 [1st Dept 2000] ["It is well settled that when the terms of an agreement are clear and unambiguous, the court will not look beyond the four corners of the agreement and will enforce the writing according to its terms"]).

Katten's duties under the Third Escrow Agreement were "solely ministerial" and straightforward: to hold the deposits in a separate, interest-bearing account, and to disburse funds therefrom to Havens upon Havens' presentation of copies of binding agreements requiring Havens to:

(i) purchase vacation residences or resort facilities (the "Properties"); (ii) renovate Properties; (iii) purchase furnishings for Properties; (iv) lease Properties; (v) lease aircraft; or (vi) incur expenses directly related to any of the foregoing.

Third Escrow Agreement, § 3. Katten was expressly relieved of any duty to investigate the authenticity of any such agreement presented by Havens:

[Katten] may rely upon any paper or other document which may be submitted to it in connection with its duties hereunder and which it believes to be genuine and to have been signed or presented by the proper party or parties and shall have no liability or responsibility with respect to the form, execution or validity thereof.

Id., § 2.2 (emphasis added). There is nothing unusual in this provision, which puts Katten in the same position as, for example, a bank that issues a letter of credit and is not required to ascertain whether documents presented are false, but only that the documents substantially comply with the letters of credit on their face (see e.g. Blonder & Co. v Citibank, N.A., 28 AD3d 180 [1st Dept 2006]).

Merril Mironer, the Katten partner who managed the escrow, attests that:

All of the distributions made by Katten from escrow every one at Havens' specific instruction was for a purpose authorized by the Third Escrow Agreement because all such distributions were either for the purchase or leasing of vacation properties, furnishing them, or for costs "directly related" to such purposes, like title insurance and other closing costs. Katten disbursed nothing from its escrow account without first being presented with a document that on its face appeared genuine, executed and binding and that obligated Havens to enter into one of the kinds of transactions expressly authorized by Section 3 of the Third Escrow Agreement. [*7]

Mironer Aff., ¶ 23 (emphasis added).

As Mironer explains, there were a total of 25 disbursements from the Escrow, all related to Havens' acquisition or furnishing of vacation property in Telluride, Colorado; Pinehurst, North Carolina; Punta Esmerelda, Mexico; Paris, France; New York, New York; or Lake Tahoe, Nevada (id., ¶ 24). The Mironer affidavit describes the background and purpose of each disbursement, and submits documents that plainly demonstrate that each disbursement was for an Authorized Purpose (see id., ¶¶ 26-35, Exhs D-K).

As the Mironer affidavit and the accompanying documentation demonstrate, a total of $1,636,246.42 (deposits and interest) was held in the Escrow from December 15, 2004 through September 30, 2005, including $480,000 from plaintiffs, and a total of $1,636,246.42 was disbursed from the Escrow, for the various purposes recited above, from December 20, 2004 through April 17, 2006 (id., ¶¶ 4, 24).

This documentation unambiguously satisfies the terms of Section 3 of the Third Escrow Agreement (see F. Garofalo Elec. Co. v New York Univ., 270 AD2d 76, supra; JRK Franklin, LLC v 164 East 87th Street LLC, 13 Misc 3d 1239[A], supra), and compels summary judgment dismissing the First Cause of Action.

In response to the summary judgment motion, plaintiffs fail to raise any triable issue of fact. Plaintiffs do not challenge the propriety of $362,660.37 in disbursements from the Escrow. As to the remaining disbursements, plaintiffs raise three objections to the propriety of the disbursements from the Escrow. They assert that the Punta Esmeralda disbursements were not for a purpose authorized under the Third Escrow Agreement, that Katten made several disbursements for lease payments before the full amount of such payments were due, and that certain other disbursements, typically for small expenditures, like furniture, were not supported by documentation. For the following reasons, these objections are rejected.

Plaintiffs argue that the Punta Esmeralda contract was merely a "preliminary agreement," whereby "an initial deposit in the amount of $457,500.00" was due "at the time of signing" and that "any further payments" would be made "only upon the satisfaction of various conditions in the future" (Opp Br., at 16). Plaintiffs further argue that that agreement "is not an agreement to purchase property in being at the time it was executed but provides only for possible construction in the future" (id). As such, plaintiffs argue, Katten's disbursements with respect to the Punta Esmeralda contract were improper. These arguments, however, are contradicted by the contract.

In the signed and countersigned Punta Esmeralda contract, a Havens affiliate and counterparty "promise to buy and sell [two] HOMES ... for the total amount of USCy $3,050,000.00" (see Mironer Aff., Exh G). Thus, on its face, the Punta Esmeralda contract is an executed agreement that requires Havens to purchase vacation residences or resort facilities. Indeed, plaintiffs cannot deny that the Punta Esmeralda contract required Havens to "incur expenses directly related to" the purchase of vacation residences, as the Third Escrow Agreement expressly authorized (Third Escrow Agreement, § 3 [iv]]).

In addition, contrary to plaintiffs' arguments, the Punta Esmeralda contract is binding. Although it required the parties "to execute a future agreement under the terms and conditions set forth in this document," it is not an unenforceable "agreement to agree," as plaintiffs imply. It indisputably contains an exchange of promises and "all of the essential terms of the contract, and the fact that the parties intended to negotiate a fuller agreement' does not negate its legal effect" (Conopco, Inc. v Wathne Ltd., 190 AD2d 587, 588 [1st Dept 1993]). [*8]

Nor was the Punta Esmeralda contract unenforceable due to any unsatisfied "conditions." Future events contemplated in the contract are either obligations of the parties (e.g., the construction of the homes) or triggers for payments (e.g., formal transfer of the homes). These are not "conditions" that would void the entire contract if they did not occur (see e.g. Roan/Meyers Assocs., L.P. v CT Holdings, Inc., 26 AD3d 295, 296 [1st Dept 2006] ["A contractual duty ordinarily will not be construed as a condition precedent absent clear language that it was so intended"]; Rooney v Slomowitz, 11 AD3d 864, 866 [3d Dept 2004] [provision for "approval of the location by [plaintiff's] architect" for road to be constructed by defendant was not condition precedent, but rather, required defendant to construct road "in a manner approved by [plaintiff's architect"]).

Plaintiffs' argument that Katten's improperly made payments of advance rent for rental properties in Punta Esmeralda and New York City is unpersuasive. Contrary to plaintiffs' arguments, Katten was not required to keep an elaborate chart of all of Havens' lease obligations, and to release funds only shortly before each rent payment fell due. "Once the lease is executed, the lessee's obligation to pay rent is fixed according to its terms" (Holy Props. Ltd., L.P. v Kenneth Cole Prods., Inc., 87 NY2d 130, 133 [1995]). Because each lease was a binding and executed agreement requiring Havens to pay the entire rent, Katten properly disbursed funds based on the leases.

Finally, plaintiffs argue that a number of disbursements for furnishings were not supported by "binding, executed agreements" (Opp Br., at 15). However, Katten submits evidence that it disbursed funds based on facially valid purchase orders for furnishings for Havens properties. I reject plaintiffs' argument that these purchase orders (some of which are signed by the sellers) are not executed agreements. Purchase orders, such as those at issue here, are enforceable agreements between a buyer and seller (see Brooklyn Hosp. Ctr. v One Beacon Ins., 5 Misc 3d 1029[A], 2004 NY Slip Op 51606[U] [Sup Ct, NY County 2004]). Plaintiffs do not dispute that the purchase orders reflect bona fide purchases of furnishings for Havens Properties. Because these documents are written evidence of transactions in which Havens was required to pay for furnishings for Properties, Katten properly disbursed funds at Havens' request.

Thus, the documentary evidence submitted by Katten establishes that all of the disbursements were made only after Katten was presented with executed documents which reflected transactions clearly authorized by Section 3 of the Third Escrow Agreement. These documents are clear and unambiguous on their face, and there is thus no genuine issue of material fact as to the propriety of Katten's disbursements. Accordingly, Katten is entitled to summary judgment dismissing plaintiffs' claim for breach of contract.

Plaintiffs also allege that Katten has breached its fiduciary duty (Second Cause of Action): (1) by drafting various versions of the Escrow Agreement that were inconsistent with the terms of the Member Agreement Documents; (2) by disbursing funds from the Escrow in violation of the Escrow Agreement; and (3) for having a "conflict of interest."

Plaintiffs allege that Katten drafted escrow agreements that "undermined the terms and conditions of the [Membership Agreement] (Amended Complaint, ¶ 23) and, in particular, "did not include a provision allowing for repayment of Member Deposits, in violation of the terms and conditions described in the [Membership Agreement] and representations made to Havens Members" (id., ¶ 29). These allegations cannot support a breach of fiduciary duty claim as a matter of law. An escrow agent has no fiduciary duty to a depositor prior to receiving a depositor's money (Muscara v Lamberti, 133 AD2d 362 [2d Dept 1987]). Katten did not draft the Escrow Agreement as escrow agent it did so as attorney for Havens (Mironer Aff., ¶ 3). Moreover, it is undisputed [*9]that Katten drafted all of the versions of the escrow agreement prior to receiving any deposit from any of the plaintiffs (id., ¶ 20). Thus, Katten's drafting of the various versions of the Escrow Agreement cannot support plaintiffs' breach of fiduciary duty claim as a matter of law.

Plaintiffs also allege that "[Katten's] fiduciary duty to plaintiffs was breached when [Katten] knowingly paid funds out of Escrow in breach of the terms of the Escrow Agreements" (Amended Complaint, ¶ 58). As demonstrated above, however, Katten fully complied with its obligations under the Third Escrow Agreement.

Plaintiffs finally assert that there is a conflict of interest because Katten managed the Escrow while it represented Havens on other matters. It is not a conflict of interest for an attorney for one party in a transaction to hold the other party's money in escrow in connection with the transaction. This happens literally every day (see e.g. Robinson v Robinson, 303 AD2d 234 [1st Dept 2003] [directing dismissal of plaintiff's claim for breach of fiduciary duty against defendant attorney that represented administrator of estate while also serving as escrow agent for both that client and plaintiff]). Plaintiffs essentially concede that "neither [Katten's] drafting of multiple Escrow Agreements nor its conflict of interest can support a claim for breach of fiduciary duty" (see Opp Br., at 23), and that "[t]he gravamen of the fiduciary duty claim is [Katten's] misapplication of the escrowed funds" (id.). However, this is precisely the conduct that plaintiffs contend constitutes a breach of contract. Because Katten indisputably undertook no duty to plaintiffs outside of the Third Escrow Agreement, and the Third Escrow Agreement as a "contractual undertaking" delimits Katten's duties (see Timmins v Tishman Constr. Corp., 9 AD3d 62, supra [while an escrow agent owes a fiduciary duty to depositors, that fiduciary duty extends only to performing its specific obligations]), it necessarily follows that plaintiffs' breach of fiduciary duty claim falls along with their breach of contract claim. Where, as here, plaintiffs "have failed to identify a single transaction that is in conflict with [the escrow provision]," a claim for breach of contract-based fiduciary duty should be dismissed on summary judgment (Adam v Cutner & Rathkopf, 238 AD2d 234, 240 [1st Dept 1997]) Therefore, plaintiffs' breach of fiduciary duty claim must be dismissed.

With regard to a claim of conversion, (Third Cause of Action) "a plaintiff must demonstrate legal ownership or an immediate superior right of possession to a specific identifiable thing and that the defendant exercised an unauthorized dominion over that property, which can be specific money, to the exclusion of the plaintiff's rights" (Rubinstein v Rubinstein, 11 Misc 3d 1062[A], 286 NY Slip Op 50358[U], * 2 [Sup Ct, NY County 2006] [internal quotation marks and citation omitted]). It is black letter law that "[a] cause of action for conversion cannot be predicated on a mere breach of contract" (Fesseha v TD Waterhouse Investor Services, Inc., 305 AD2d 268, 269 [1st Dept 2003] [dismissing plaintiff's conversion claim that "alleged no independent facts sufficient to give rise to tort liability and, thus, was nothing more than a restatement of his breach of contract claim"] [internal quotation marks and citation omitted]; see also Yeterian v Heather Mills N.V. Inc., 183 AD2d 493 [1st Dept 1992]).

Plaintiffs base their conversion claim on the single factual allegation that Katten "disbursed funds from Escrow in violation of the Escrow Agreements" (Amended Complaint, ¶ 63). Thus, plaintiffs' conversion claim must be dismissed as redundant of their contract claim.

A cause of action for money had and received (Fourth Cause of Action) "requires a showing that: (1) defendant received money belonging to plaintiff; (2) defendant benefitted from the receipt of the money; and (3) under principles of good conscience defendant should not be allowed to retain that money" (Insurance Co. of State of Pa. v HSBC Bank USA, 37 AD3d 251, 255 [1st Dept 2007]. [*10]

"An action for money had and received does not lie where there is an express contract between the parties" (Fesseha v TD Waterhouse Investor Services, Inc., 305 AD2d at 269; see also Parsa v State of New York, 64 NY2d 143, 148 [1984] [money had and received is an "obligation which the law creates in the absence of an agreement"]; Phoenix Garden Rest., Inc. v Chu, 245 AD2d 164 [1st Dept 1997]). Plaintiffs base their money had and received claim on the single factual allegation that Katten "paid out the funds deposited in Escrow to Havens ... in violation of the Escrow Agreements" (Amended Complaint, ¶ 67). Thus, plaintiffs' money had and received claim must be dismissed as redundant of their contract claim.

The elements of a claim for aiding and abetting fraud (Fifth Cause of Action) under New York law are: (1) the existence of a fraud; (2) defendant's knowledge of the fraud; and (3) defendant's provision of substantial assistance to advance the fraud's commission (Sterling Natl. Bank v Ernst & Young, LLP, 9 Misc 3d 1129[A], 2005 NY Slip Op 51850[U] [Sup Ct, NY County 2005]).

The aiding and abetting fraud claim is simply a restatement of the breach of contract claim. Plaintiffs basically allege that Havens promised them that their deposits would be there for them if they resigned or were terminated, and failed to keep that promise (see Amended Complaint, ¶ 14 ["this scheme provided the prospect that a Founding Member's Deposit would be refundable either in cash or upon the liquidation of the real property it was used to purchase"]).However, the Membership Agreement Documents the "entire agreement of the parties" made no such promise, and these documents made no promise that the Escrow Fund would remain perpetually intact to secure plaintiffs' remote repayment rights (see Certificate, ¶ 2 ["THIS RIGHT TO REPAYMENT is backed by and subject to the availability of the assets of the Company"]).Moreover, even if Havens had made such a promise to plaintiffs, a broken promise cannot constitute fraud as a matter of law, because a fraud claim must be based upon a misrepresentation of present or past fact, not a false expression of future intent (see e.g. Martian Entertainment, LLC v Harris, 12 Misc 3d 1190[A], 2006 NY Slip Op 51517[U], * 5 [Sup Ct, NY 2006] ["A viable claim of fraud concerning a contract must allege misrepresentations of present facts (rather than merely of future intent) that were collateral to the contract and which induced the allegedly defrauded party to enter into the contract"] [internal quotation marks and citation omitted]). For this reason, a "plaintiff cannot transform a breach of contract claim into a fraud claim" when the alleged fraud was merely that defendant had "entered [into a certain] agreement while intending not to perform it" (Angel v Bank of Tokyo-Mitsubishi, Ltd., 39 AD3d 368, 369 [1st Dept 2007]; see e.g. New York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995] [affirming dismissal of fraud claim, where plaintiff alleged "nothing more than a breach of the contract and any covenants implied"] ).

In their opposition, plaintiffs attempt to recast the alleged fraud as fraudulent inducement by alleging that they were induced to become Founding Members as a result of Havens' representations concerning escrow protections for their deposits, which misrepresentations were completely distinct from any contractual obligations. However, Havens' alleged representations that plaintiffs' deposits would be absolutely secured were not collateral to the Membership Documents (see e.g. Martian Entertainment , LLC v Harris, 12 Misc 3d 1190[A], * 5 [representations underlying fraudulent inducement claim must be "collateral to the contract"]). To the contrary, the degree of security backing the Deposits is expressly provided by the Certificates (see Certificate, ¶ 1 [the membership deposits are subject to refund 30 years from the date of the Certificate and "pursuant to and subject to the terms and conditions of the Membership Agreement and the Membership Plan]"; id., ¶ 2 [the [*11]refund right "is backed by and subject to the availability of the assets of (Havens)"]). Indeed, it is plaintiffs' own position that each of the Membership Documents "discusses Deposits and their use and repayment ... and thereby implicates use of an escrow" (Pls Facts, ¶¶ 2, 4, 6). An issue "central" to a contract cannot be construed as collateral to that contract (PSI Intl., Inc. v Ottimo, 272 AD2d 279 [1st Dept 2000]).

Moreover, even fraudulent inducement requires "misrepresentations of present facts (rather than merely of future intent)" (Martian Entertainment, LLC v Harris, 12 Misc 3d 1190[A], * 5). Plaintiffs allege that Havens promised that "deposits would be handled in a specified way," that they "would be held in escrow ... for the protection and benefit of the Founding Members," and that "[Founding Members] would be protected by the continuing existence of cash on deposit or real estate available to fund repayment if the venture failed" (Opp Br., at 24, 25 [emphasis added]; Egnotovich Aff., ¶ 6 [emphasis added]; see also Loeb Aff., ¶¶ 4-5). To the extent, if any, that these representations made by Havens are untrue, they are broken promises, and not fraudulent statements of fact (see e.g. Morgan, Lewis & Bockius LLP v IBuyDigitial.com, Inc., 14 Misc 3d 1224[A], 2007 NY Slip Op 50149[U], *7 [Sup Ct, NY County 2007] [dismissing counterclaim that plaintiff "fraudulently induced (defendant) into entering the engagement letter by stating that (plaintiff) would be personally involved in handling the IPO, that the fees would be capped at $425,000, that the IPO would be consummated by March 2005 and that the legal fees charged would be limited to work on the IPO"] [emphasis added]; Ullmann v Norma Kamali, Inc., 207 AD2d 691, 692-693 [1st Dept 1994] ["cause of action for fraud does not arise" based on "failure to perform promises of future acts"] [citation omitted]).

Consequently, the aiding and abetting fraud claim must be dismissed.

I have considered the remaining claims, and I find them to be without merit.

Accordingly, it is

ORDERED that defendants' motion for summary judgment is granted and the complaint is dismissed with costs and disbursements to defendant as taxed by the Clerk of the Court upon the submission of an appropriate bill of costs; and it is further

ORDERED that the Clerk is directed to enter judgment accordingly.

Dated: ___________

ENTER:

_______________________

J.S.C.