In Kaufman v. Torkan , Ivan Kaufman supposedly agreed to give Kouros Torkan 90% of the financing needed to buy a disparate commercial property in Chelsea, in return for a first mortgage and Torkan's promise to withdraw his bid on a waterfront parcel. But, a year later, when the Chelsea deal didn't materialize, Torkan and his wife acquired the waterfront property.
When Kaufman later sued Torkan alleging fraud and breach of a "joint venture agreement," the Nassau County Supreme Court denied Torkan's dismissal request.
On appeal, the Appellate Division, Second Department, found Kaufman's "joint venture" claim unconvincing, because there was no provision in their alleged agreement for the sharing of profits and losses. Kaufman and Torkan were more like lender and borrower, rather than joint venturers, with Kaufman lacking any control over the waterfront property's development.
Kaufman's fraud claim also failed because it related to a breach of contract and wasn't "collateral or extraneous" to the parties' supposed agreement.
Will Kaufman profit from this loss?
To download a copy of the Appellate Division's decision, please use this link: Kaufman v. Torkan