Rude v Hazlitt

[*1] Rude v Hazlitt 2005 NY Slip Op 51144(U) Decided on April 12, 2005 Supreme Court, Queens County Taylor, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on April 12, 2005
Supreme Court, Queens County

Murray Rude, Plaintiff(s),

against

John G. Hazlitt, JACQUELINE HAZLITT, and MURRAY RUDE SERVICES, INC., Motion Cal. Number 15, Defendant(s).



2750/2005

Janice A. Taylor, J.

The plaintiff in this action seeks money damages, an accounting, and injunctive relief based on allegations of breach of contract, default in payment pursuant to a secured promissory note, breach of a security agreement, conversion, fraud, unjust enrichment, interference with contractual relations and related relief. The underlying subject matter of the lawsuit is a business, MURRAY RUDE SERVICES, INC., named herein as a co-defendant, which was purchased by the defendant, JOHN G. HAZLITT, from the plaintiff, MURRAY RUDE, pursuant to contract dated March 6, 2002. [*2]

Pursuant to C.P.L.R. §6401(a), a trial court has the discretion, upon a motion by a party with an "apparent interest" in property that is the subject of an action, to appoint a temporary receiver of the property where there is danger that the property will be "removed from the state, or lost, materially injured or destroyed" (C.P.L.R. §6401 [a]; see, Singh v. Brunswick Hosp. Ctr., Inc., 2 AD3d 433 [2d Dept. 2003]).

The appointment of a temporary receiver is an extreme remedy that should be granted only where the moving party has made a clear evidentiary showing of the necessity for the conservation of the property at issue and the need to protect the moving party's interests (see, Secured Capital Corp. of NY v. Dansker, 263 AD2d 503, 504[2d Dept. 1999]; DaSilva v. DaSilva, 225 AD2d 513 [2d Dept. 1996]; Modern Collection Assoc. v. Capital Group, 140 AD2d 594[ 2d Dept. 1988]). The Second Department has sparingly sanctioned the use of a receiver, and only under compelling circumstances.

Plaintiff-movant has failed to demonstrate the clear evidentiary showing mandated by the Second Department for the relief requested. The plaintiff has offered only conclusory allegations as to dissipation of assets, and has failed to demonstrate a need to protect his interests. The plaintiff's interest in the subject business appears to be minimal, based upon the submissions of defendant JOHN G. HAZLITT, indicating that the latter has paid approximately 90% of the contractual purchase price of the subject business, and that the plaintiff's desire to repurchase the aforesaid business has prevented the repayment of the remainder of the amount due on the promissary note. Defendant JOHN G. HAZLITT has submitted evidence that he made the three (3) $50,000.00 payments required by the contract. He has also demonstrated that, of the $104,171.30, which includes interest, which was due under the $100,000.00 promissary note, ($10,417.13 times ten [10] monthly installments), he made $84,280.02 in payments ($7,661.82 times eleven [11] payments), leaving a balance on the original amount of $250,000.00 of only $19,891.28, of which defendant claims he was given a reduction of $1,083.33 per month (totaling $11,916.63), which would leave a balance due the plaintiff on the purchase of only $7,974.65 if the court's calculations are correct. Thus, there has been no showing that the plaintiff has a significant interest in the business, which is in jeopardy of being lost. Moreover, the plaintiff's self-serving claims of other monies loaned to the business are unsupported by documentary evidence.

Accordingly, the motion is denied. Based upon the foregoing, the court notes that the plaintiff has failed to satisfy the statutory criteria for temporary injunctive relief, and sua sponte, vacates and recalls the stay in this matter.

Dated: April 12, 2005

JANICE A. TAYLOR, J.S.C. [*3]

2750-05_Rude_Receiver_6401