Preview
FILED: NEW YORK COUNTY CLERK 11/04/2016 04:19 PM INDEX NO. 650159/2010
NYSCEF DOC. NO. 389 RECEIVED NYSCEF: 11/04/2016
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
HARVEY RUDMAN and HAROLD KUPLESKY, on
Index No. 650159/10
Behalf of Each of Them Individually And On Behalf Of
Starrett City Preservation LLC, Derivatively,
Hon. Shirley Werner Kornreich
Plaintiffs,
Motion Seq. No. 9
- against -
CAROL GRAM DEANE, THE ESTATE OF DISQUE
D. DEANE by CAROL G. DEANE,
as TEMPORARY EXECUTRIX, SALT KETTLE LLC,
ST. GERVAIS LLC, STARRETT CITY
PRESERVATION LLC, DD SPRING CREEK LLC,
SK SPRING CREEK LLC, SPRING CREEK PLAZA
LLC, DD SHOPPING CENTER LLC and SK
SHOPPING CENTER LLC,
Defendants.
PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO THE
THE “MOTION TO CONFIRM” BY SPRING CREEK
Plaintiffs Harvey Rudman and Harold Kuplesky submit this Memorandum of Law,
together with the Affirmation of Jacqueline Veit, dated November 4, 2016, and the exhibits
thereto, (“Veit Aff.”) in opposition to the “Motion to Confirm That All Claims Against It Have
Been Resolved” filed by defendant Spring Creek Plaza LLC (“Spring Creek”).
Preliminary Statement
Spring Creek acknowledges that this Court authorized the Defendants to file a narrow
motion. In Spring Creek’s words: “On August 9, 2016, the parties participated in a telephone
conference with this Court, during which the parties expressed disagreements regarding which
portions of Plaintiffs’ claims survived the summary judgment decision [the Appellate Division’s
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April 19, 2016 decision (“AD Decision”)]. The Court instructed Defendants to submit motions
on September 16, 2016 to address this question.” SC Mem. at 4.
To the extent that Spring Creek’s motion covers the authorized topic, Spring Creek
merely duplicates arguments made by the other Defendants in their motion to dismiss. Those
arguments are without merit, as set forth in Plaintiffs’ opposition to that motion, filed
concurrently herewith and incorporated herein by reference (“Opp. Mem.”).
In this motion, however, Spring Creek goes beyond what this Court authorized. It argues
alleged grounds for dismissal that Spring Creek could have brought in its CPLR 3211 motion to
dismiss filed in 2012, or in its CPLR 3212 motion filed in 2013. It did neither, and it cannot use
this motion to obtain yet a third bite at the apple and to further delay the trial in this case.
The “Motion to Confirm” should be denied in all respects.
ARGUMENT
THE “MOTION TO CONFIRM” IS PROCEDURALLY
IMPROPER AND LACKS MERIT
A. The Appellate Division Decision Does Not Provide Any Basis
To Dismiss The Tenth Cause of Action Against Spring Creek
The tenth cause of action in the Second Amended Complaint (“SAC”), for a declaratory
judgment, remains pending against Spring Creek. That claim seeks a declaration of the parties’
rights with respect to transfers of assets made by SCA and its general partners to various parties,
including Spring Creek, in violation of the Omnibus Assignments.
Spring Creek argues that “at least with respect to non-cash assets,” this Court’s prior
decision on partial summary judgment precludes the claim, because this Court held that plaintiffs
have “no entitlement” to non-cash assets. SC Mem. at 5. Spring Creek contends that this portion
of this Court’s prior decision remains binding following the appeal, because the Appellate
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Division “affirmed the decision, modifying it only to add a declaration” on the Ninth Cause of
Action. Id. at 3.
As set forth in Opposition to the other Defendants’ Motion to Dismiss, the Appellate
Division did not merely “add a declaration;” it replaced this Court’s declaration in its entirety.
And contrary to Spring Creek’s and the other Defendants’ contention, the Appellate Division did
not “affirm” this Court’s analysis that led to the replaced declaration. See Opp. Mem. at 3-7.
Accordingly, this Court is not bound by its prior decision. Moreover, as we show in our
Opposition, this Court can, and should, find that non-cash assets are subject to distribution. Id. at
10-17.
In any event, the claim against Spring Creek applies with respect to cash assets as well,
including without limitation to (i) $3,273,307 transferred to Spring Creek from the Refinancing
proceeds (SAC ¶81), (ii) $250,000 from the Refinancing proceeds used to create a reserve for
Spring Creek (id.), and (iii) cash distributions by Spring Creek (id. ¶ 180). Even Spring Creek
acknowledges that nothing in this Court’s prior ruling or the AD Decision supports dismissal of
the claim against it insofar as it involves cash assets. The tenth cause of action, therefore, must
be tried against Spring Creek, as against all Defendants.
B. Spring Creek’s Remaining Arguments Are Precluded
Spring Creek’s remaining arguments that declaratory judgment is “unavailable” against it
are nothing more than arguments that could have, and if valid should have, been made in its prior
CPLR 3211 or 3212 motions. SC Mem. at 6. Its failure to do so precludes them now.
A party only may bring one CPLR 3211(a) motion. See CPLR 3211(e) (“no more than
one such motion shall be permitted”). As stated in McKinney’s commentary, “there shall be but
one motion to dismiss a cause of action under subdivision (a). And if there are several causes of
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action stated, this provision means that the movant must gather together all of his subdivision (a)
objections, or such of them as he wants to take by motion, for use on that single CPLR 3211
opportunity.” David D. Siegel, Practice Commentaries, McKinney’s Cons. Laws of NY, Book
7B, CPLR C3211:55. Likewise, a party may not bring successive summary judgment motions
under CPLR 3212, absent a showing of newly discovered evidence or a change in governing law.
See, e.g., Amill v. Lawrence Ruben Co., 117 A.D.3d 433, 434 (1st Dep’t 2014).
Spring Creek has already made CPLR 3211 and 3212 motions, on May 23, 2012 and July
3, 2013 respectively. It offers no procedural basis for bringing this motion now, and no
suggestion that any new facts or law has arisen that would justify an additional dispositive
motion at this late date. Spring Creek cannot circumvent the CPLR by omitting the word
“dismiss” from the title if its motion and entitling it instead a “motion to confirm that all claims
against it have been resolved.” Its arguments -- that the tenth cause of action should be
dismissed because it does not adequately allege a justiciable controversy with Spring Creek, and
because cash is a fungible asset – should have been made, if at all, in its prior motions.
Nor would this motion have merit even if it were procedurally permitted. The
declaratory judgment claim against Spring Creek is plainly justiciable. Spring Creek argues that
there is no justiciable controversy because there are “no remaining claims alleging wrongdoing”
by Spring Creek. There are. Spring Creek is alleged to have received and used assets that were
transferred to it in violation of Omnibus Assignments by SCA’s general partners, who also are
the managers of Spring Creek. The SAC seeks a declaration invalidating these transfers and
declaring Preservation’s rights with respect to these assets. SAC ¶177, 180; CPLR 3001, 3017.
The requested remedy would unquestionably affect Spring Creek’s rights and its legal relations
with Preservation and Plaintiffs.
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Not only is this a justiciable controversy, but it falls squarely within the ambit of a proper
declaratory judgment action. CPLR 3001 provides that the court “may render a declaratory
judgment having the effect of a final judgment as to the rights and other legal relations of the
parties to a justiciable controversy whether or not further relief is or could be claimed.” CPLR
3001. See also Patrick M. Connors, Practice Commentaries, McKinney’s Cons. Laws of NY,
Book 7B, CPLR C3001:5 (declaratory relief may be sought alone or may be joined with
demands for other relief; a second action can be brought if need be for failure to comply with the
declared rights).
The same authority precludes Spring Creek’s argument that dismissal is warranted
because the mere transfer of cash “from a defendant whose conduct is at issue in this case to
Spring Creek provides no basis for a claim against Spring Creek.” SC Mem. at 6. Spring Creek
is alleged to have been more than a mere receptacle for the wrongfully transferred assets.
Moreover, even if that were all that had been alleged, it would not justify dismissal. The
requested declaration would determine, and have an effect on, the rights and legal relations of the
parties vis-a-vis each other. That is sufficient to support a declaratory judgment claim.
Conclusion
For the foregoing reasons, the SC Motion should be denied in all respects.
Dated: New York, New York GOLENBOCK EISEMAN ASSOR
November 4, 2016 BELL & PESKOE LLP
By: /s/ Jacqueline G. Veit
David J. Eiseman
Jacqueline G. Veit
711 Third Avenue, 17th Floor
New York, New York 10017
(212) 907-7300
Attorneys for Plaintiffs
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Preview
FILED: NEW YORK COUNTY CLERK 11/04/2016 04:19 PM INDEX NO. 650159/2010 NYSCEF DOC. NO. 389 RECEIVED NYSCEF: 11/04/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK HARVEY RUDMAN and HAROLD KUPLESKY, on Index No. 650159/10 Behalf of Each of Them Individually And On Behalf Of Starrett City Preservation LLC, Derivatively, Hon. Shirley Werner Kornreich Plaintiffs, Motion Seq. No. 9 - against - CAROL GRAM DEANE, THE ESTATE OF DISQUE D. DEANE by CAROL G. DEANE, as TEMPORARY EXECUTRIX, SALT KETTLE LLC, ST. GERVAIS LLC, STARRETT CITY PRESERVATION LLC, DD SPRING CREEK LLC, SK SPRING CREEK LLC, SPRING CREEK PLAZA LLC, DD SHOPPING CENTER LLC and SK SHOPPING CENTER LLC, Defendants. PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO THE THE “MOTION TO CONFIRM” BY SPRING CREEK Plaintiffs Harvey Rudman and Harold Kuplesky submit this Memorandum of Law, together with the Affirmation of Jacqueline Veit, dated November 4, 2016, and the exhibits thereto, (“Veit Aff.”) in opposition to the “Motion to Confirm That All Claims Against It Have Been Resolved” filed by defendant Spring Creek Plaza LLC (“Spring Creek”). Preliminary Statement Spring Creek acknowledges that this Court authorized the Defendants to file a narrow motion. In Spring Creek’s words: “On August 9, 2016, the parties participated in a telephone conference with this Court, during which the parties expressed disagreements regarding which portions of Plaintiffs’ claims survived the summary judgment decision [the Appellate Division’s 2660561.3 1 of 5 April 19, 2016 decision (“AD Decision”)]. The Court instructed Defendants to submit motions on September 16, 2016 to address this question.” SC Mem. at 4. To the extent that Spring Creek’s motion covers the authorized topic, Spring Creek merely duplicates arguments made by the other Defendants in their motion to dismiss. Those arguments are without merit, as set forth in Plaintiffs’ opposition to that motion, filed concurrently herewith and incorporated herein by reference (“Opp. Mem.”). In this motion, however, Spring Creek goes beyond what this Court authorized. It argues alleged grounds for dismissal that Spring Creek could have brought in its CPLR 3211 motion to dismiss filed in 2012, or in its CPLR 3212 motion filed in 2013. It did neither, and it cannot use this motion to obtain yet a third bite at the apple and to further delay the trial in this case. The “Motion to Confirm” should be denied in all respects. ARGUMENT THE “MOTION TO CONFIRM” IS PROCEDURALLY IMPROPER AND LACKS MERIT A. The Appellate Division Decision Does Not Provide Any Basis To Dismiss The Tenth Cause of Action Against Spring Creek The tenth cause of action in the Second Amended Complaint (“SAC”), for a declaratory judgment, remains pending against Spring Creek. That claim seeks a declaration of the parties’ rights with respect to transfers of assets made by SCA and its general partners to various parties, including Spring Creek, in violation of the Omnibus Assignments. Spring Creek argues that “at least with respect to non-cash assets,” this Court’s prior decision on partial summary judgment precludes the claim, because this Court held that plaintiffs have “no entitlement” to non-cash assets. SC Mem. at 5. Spring Creek contends that this portion of this Court’s prior decision remains binding following the appeal, because the Appellate 2 2660561.3 2 of 5 Division “affirmed the decision, modifying it only to add a declaration” on the Ninth Cause of Action. Id. at 3. As set forth in Opposition to the other Defendants’ Motion to Dismiss, the Appellate Division did not merely “add a declaration;” it replaced this Court’s declaration in its entirety. And contrary to Spring Creek’s and the other Defendants’ contention, the Appellate Division did not “affirm” this Court’s analysis that led to the replaced declaration. See Opp. Mem. at 3-7. Accordingly, this Court is not bound by its prior decision. Moreover, as we show in our Opposition, this Court can, and should, find that non-cash assets are subject to distribution. Id. at 10-17. In any event, the claim against Spring Creek applies with respect to cash assets as well, including without limitation to (i) $3,273,307 transferred to Spring Creek from the Refinancing proceeds (SAC ¶81), (ii) $250,000 from the Refinancing proceeds used to create a reserve for Spring Creek (id.), and (iii) cash distributions by Spring Creek (id. ¶ 180). Even Spring Creek acknowledges that nothing in this Court’s prior ruling or the AD Decision supports dismissal of the claim against it insofar as it involves cash assets. The tenth cause of action, therefore, must be tried against Spring Creek, as against all Defendants. B. Spring Creek’s Remaining Arguments Are Precluded Spring Creek’s remaining arguments that declaratory judgment is “unavailable” against it are nothing more than arguments that could have, and if valid should have, been made in its prior CPLR 3211 or 3212 motions. SC Mem. at 6. Its failure to do so precludes them now. A party only may bring one CPLR 3211(a) motion. See CPLR 3211(e) (“no more than one such motion shall be permitted”). As stated in McKinney’s commentary, “there shall be but one motion to dismiss a cause of action under subdivision (a). And if there are several causes of 3 2660561.3 3 of 5 action stated, this provision means that the movant must gather together all of his subdivision (a) objections, or such of them as he wants to take by motion, for use on that single CPLR 3211 opportunity.” David D. Siegel, Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C3211:55. Likewise, a party may not bring successive summary judgment motions under CPLR 3212, absent a showing of newly discovered evidence or a change in governing law. See, e.g., Amill v. Lawrence Ruben Co., 117 A.D.3d 433, 434 (1st Dep’t 2014). Spring Creek has already made CPLR 3211 and 3212 motions, on May 23, 2012 and July 3, 2013 respectively. It offers no procedural basis for bringing this motion now, and no suggestion that any new facts or law has arisen that would justify an additional dispositive motion at this late date. Spring Creek cannot circumvent the CPLR by omitting the word “dismiss” from the title if its motion and entitling it instead a “motion to confirm that all claims against it have been resolved.” Its arguments -- that the tenth cause of action should be dismissed because it does not adequately allege a justiciable controversy with Spring Creek, and because cash is a fungible asset – should have been made, if at all, in its prior motions. Nor would this motion have merit even if it were procedurally permitted. The declaratory judgment claim against Spring Creek is plainly justiciable. Spring Creek argues that there is no justiciable controversy because there are “no remaining claims alleging wrongdoing” by Spring Creek. There are. Spring Creek is alleged to have received and used assets that were transferred to it in violation of Omnibus Assignments by SCA’s general partners, who also are the managers of Spring Creek. The SAC seeks a declaration invalidating these transfers and declaring Preservation’s rights with respect to these assets. SAC ¶177, 180; CPLR 3001, 3017. The requested remedy would unquestionably affect Spring Creek’s rights and its legal relations with Preservation and Plaintiffs. 4 2660561.3 4 of 5 Not only is this a justiciable controversy, but it falls squarely within the ambit of a proper declaratory judgment action. CPLR 3001 provides that the court “may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justiciable controversy whether or not further relief is or could be claimed.” CPLR 3001. See also Patrick M. Connors, Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C3001:5 (declaratory relief may be sought alone or may be joined with demands for other relief; a second action can be brought if need be for failure to comply with the declared rights). The same authority precludes Spring Creek’s argument that dismissal is warranted because the mere transfer of cash “from a defendant whose conduct is at issue in this case to Spring Creek provides no basis for a claim against Spring Creek.” SC Mem. at 6. Spring Creek is alleged to have been more than a mere receptacle for the wrongfully transferred assets. Moreover, even if that were all that had been alleged, it would not justify dismissal. The requested declaration would determine, and have an effect on, the rights and legal relations of the parties vis-a-vis each other. That is sufficient to support a declaratory judgment claim. Conclusion For the foregoing reasons, the SC Motion should be denied in all respects. Dated: New York, New York GOLENBOCK EISEMAN ASSOR November 4, 2016 BELL & PESKOE LLP By: /s/ Jacqueline G. Veit David J. Eiseman Jacqueline G. Veit 711 Third Avenue, 17th Floor New York, New York 10017 (212) 907-7300 Attorneys for Plaintiffs 5 2660561.3 5 of 5