Congregation Yetev Lev D' Satmar, Inc. v 26 Adar N.B. Corp.
Annotate this CaseDecided on June 26, 2006
Supreme Court, Kings County
Congregation Yetev Lev D' Satmar, Inc., LUDOVICK WEISZ and JACOB SCHONFELD, Plaintiffs,
against
26 Adar N.B. Corp., CONGREGATION BETH JOEL, BETH FEIGE, INC., NACHMAN BRACH and BAY RIDGE FEDERAL SAVINGS AND LOAN ASSOCIATION, Defendants.
13224/90
Arthur M. Schack, J.
The remaining portions of this 16-year-old action are the counterclaims of defendants 26 Adar N.B. Corp. (Adar), and Nachman Brach, an individual, for the use and occupancy of the premises at 533-541 Bedford Avenue, Brooklyn, New York, as a synagogue by plaintiffs Congregation Yetev Lev D'Satmar, Inc. (CYL) and the other plaintiffs. Counsel for Adar and Brach filed a note of issue and certificate of readiness on January 26, 2006. Defendants' counsel checked box 7 on the certificate of readiness, which states, "Discovery proceedings now known to be necessary completed." CYL moves for an order to: strike Adar and Brach's note of issue and certificate of readiness, pursuant to CPLR §§ 3401 and 3402, because it is premature with outstanding discovery yet to be completed; extend this Court's prior discovery order until 90 days after the Appellate Division, Second Department, makes a determination in the pending appeal of my previous April 19, 2005 decision and order in this action; or, dismiss this action because Adar no longer exists as a corporation and therefore has no right to continue this [*2]action upon its counterclaims against plaintiffs.
For the foregoing reasons, the January 26, 2006-certificate of readiness and note of issue filed by counsel for Adar and Brach is vacated forthwith. Further, the case can continue with the Adar corporate entity's continued existence as "Nachman Brach Inc.," and a new discovery scheduled as ordered by the Court.
Background
This case is part of the continuing dispute within the Satmar Chassidic community. Plaintiff CYL is the Satmar umbrella organization. Rabbi Joel Teitelbaum (1887-1979), a holocaust survivor, established the Satmar sect in the United States after World War II. He was the last elected Chief Rabbi of Satu Mare, a Transylvanian city, on the Hungarian-Roumanian border. In 1948, Rabbi Teitelbaum's Brooklyn community formally incorporated as Congregation Yetev Lev D'Satmar, Inc., with its settlement in the Williamsburg section of Brooklyn. Rabbi Teitelbaum's duties as Grand Rabbi or "Satmar Rebbe" were set forth in CYL's bylaws. The Satmar community flourished under Rabbi Joel Teitelbaum's leadership and Rabbi Teitelbaum, in 1974, established Kiryas Joel, a new Satmar community in Orange County, near Monroe, New York.
After the 1979 passing of Rabbi Joel Teitelbaum, his nephew, Rabbi Moses Teitelbaum, was chosen as the new Grand Rabbi and vested with the same authority as his uncle. Rabbi Moses Teitelbaum, as the Satmar Rebbe, appointed his eldest son, Rabbi Aaron Teitelbaum, as Chief Rabbi of Kiryas Joel and his younger son, Rabbi Zalman Teitelbaum, as Chief Rabbi of Williamsburg. Justice Barasch, in his October 22, 2004 decision and order in a companion matter, Application of Congregation Yetev Lev D'Satmar, Inc., v Kahan, 5 Misc 3d 1023 (A), 2004 NY Slip Op 51515 (U), reviewed the history of the Satmars in New York, and observed, at 3-4, that with the appointment of Rabbi Zalman Teitelbaum: a far-reaching feud erupted between the siblings and their respective
adherents. As the polarization of the two sides escalated, Satmar
Chasidim began to be identified as either Aaronis or Zalis depending
upon to whom they pledged their allegiance. The polarization has so
insidiously divided the two camps to the point that they each dispute
the other side's legitimacy to be identified as true Satmar Chasidim.
Control of the of the Congregations' synagogues, cemetery, assets,
charitable, educational and religious institutionsand even its corporate
name has been hotly contested both in and out of the judicial forum. CYL, as the owner of five real property parcels, known as 533-541 Bedford Avenue, Brooklyn, New York, built a synagogue and residence for Grand Rabbi Joel Teitelbaum and his wife, Feige. In 1978 a series of real estate transactions began which, combined with the subsequent factional Satmar schism, resulted in the 1990 commencement of the instant action. Numerous Supreme Court Justices and Appellate Division, Second Department, panels have had to deal with the instant and related cases. [*3]See 192 AD2d 501 (1993); 219 AD2d 186 (1996), lv denied 88 NY2d 808 (1996); 258 AD2d 494 (1999), lv denied 93 NY2d 1030 (1999); 265 AD2d 360 (1999); 300 AD2d 338 (2002); 308 AD2d 446 (2003); 308 AD2d 447 (2003); and, Justice Barasch's previously cited October 22, 2004 decision and order.
In 1978 CYL conveyed the 533-541 Bedford Avenue property to Congregation Beth Joel (which used the property to secure a $1,000,000 building mortgage loan for Kiryas Joel). Beth Joel, in 1980, conveyed the premises to Congregation Beth Feige, Inc., which subsequently conveyed the property, in 1989, to Adar, a corporation owned by Nachman Brach. Brach, in April 1990, installed metal gates over the entrance to the Bedford Avenue synagogue, which according to Appellate Division, Second Department, at 219 AD2d 186, 189, was "apparently in an effort to keep out the members of Yetev Lev [219 AD2d 186, 189]," who had been using the premises to pray since 1978.
CYL, in May 1990, sued defendants to establish its ownership rights, claiming a fraudulent chain of conveyances. CYL was granted a temporary restraining order, then a preliminary injunction, and finally a permanent injunction against Adar and Brach. The Appellate Division, Second Department, 219 AD2d 186, dismissed CYL's complaint. Adar and Brach were then granted leave by a Supreme Court Justice to interpose counterclaims for use and occupancy, which were affirmed, 258 AD2d 494. After further motion practice, most of which is irrelevant to the instant motion, a different Supreme Court Justice, on August 27, 2001, granted partial summary judgment to CYL to dismiss the counterclaims for use and occupancy of the residential portion of the property. The Appellate Division, Second Department, 300 AD2d 338, issued on December 9, 2002, reversed that order and reinstated Adar and Brach's counterclaims for use and occupancy of the residential portion of the property, finding that, "the plaintiffs [CYL and others] failed to demonstrate the absence of any triable issue of fact with respect to the defendants' counterclaim for damages for the use and occupancy of the residential portion of the subject property."
Justice Barasch, at 5 of his October 22, 2004 decision, noted that, "[l]itigation between the parties has unfortunately been mired by an ugly history. There have been issues of judge shopping and allegations of violence and bribery." With the death two months ago, in April 2006, of Grand Rabbi Moses Teitelbaum, the dispute continues between the competing followers of the Teitelbaum brothers, Aaron and Zalman.
Discussion
26 Adar N.B. Corp. was dissolved on September 23, 1998 by proclamation of the New York State Commissioner of Taxation and Finance, pursuant to Tax Law § 203-a, for nonpayment of franchise taxes [exhibit A of affirmation in opposition]. In my April 19, 2005 decision and order in this matter, I concluded that:
If 26 Adar N.B. Corporation or a successor corporation exists the
Court orders that all parties will exchange the names and addresses
of all witnesses, and any documents and reports to be used in this [*4]
proceeding, within sixty (60) days of the date of notice of entry of
this order. Further, examinations before trial of all witnesses must
be concluded within one hundred eighty (180) days of the date of
notice of entry of this order. Further, the note of issue and certificate
of readiness presently in effect for this action is vacated forthwith.
The due date for a new note of issue and certificate of readiness is
two hundred ten (210) days from the date of the notice of entry of
this order. In the event of any noncompliance with this discovery
schedule, costs or other sanctions may be imposed.
I issued this decision and order to determine if Adar or a successor corporation existed. Further, because the case was in "suspended animation" for several years due to its protracted motion practice, it was necessary to provide CYL with time to track down its witnesses, determine if its experts were still available, and give CYL time to conduct additional discovery. Defendants Adar and Brach, rather than conduct discovery, filed an appeal of my order [exhibit B of reply affirmation], two days subsequent to my April 19, 2005 decision and order.
CYL's counsel argues, in paragraph 3 of his affirmation in support of the motion, that since defendants didn't comply with my discovery order, "your affiant . . . did not want to expend the scarce resources of his clients by conducting additional discovery until such time as the Appellate Division made a final decision on defendants' appeal." Further, plaintiffs request that my discovery order be extended until 90 days after the Appellate Division rules on the pending appeal. Meanwhile, plaintiffs request that I vacate the January 26, 2006 note of issue and certificate or readiness because outstanding discovery was not completed and that Adar and Brach's note of issue filing "is nothing more than an attempt to circumvent this Court's April 19, 2005 Decision and Order . . . rather than patiently await the Appellate Division's determination as to whether or not said April 19, 2005 Decision and Order was properly made [paragraph 7 of affirmation in support of the motion]." Lastly, plaintiffs allege that Adar no longer exists as a corporate entity and therefore its counterclaims must be dismissed.
Defendants' counsel claims, in his affirmation in opposition, that Adar has been resurrected as a corporation, with its name changed to "Nachman Brach Inc." Further, that since 210 days have elapsed from my previous order a new note of issue and certificate of readiness could be obtained. Defendants claim, in paragraph 8 of their affirmation in opposition, that, "movants, the plaintiffs, have never sought any additional discovery and they should be prepared at this time to proceed to trial. The defendants are certainly prepared."
With respect to the existence of the Adar corporate entity, the dissolution of 26 Adar N.B. Corp. was annulled on March 4, 2005, by the New York State Commissioner of Taxation and Finance, pursuant to Tax Law §203-a [exhibit A of affirmation in opposition], with its payment of all franchise taxes, penalties and interest. When a [*5]dissolved corporation is reinstated upon payment of unpaid franchise taxes, penalties and interest, the reinstatement is nunc pro tunc. The Court, in Lorisa Capital Corp. v Gallo, 119 AD2d 99, 110 (2d Dept 1986), analyzed Tax Law § 203-a (7), holding that "a delinquent corporation may be reinstated nunc pro tunc upon the filing of a certificate of the tax commission stating that all franchise taxes, penalties and interest charges have been paid." In St. James Const. Corp. v Long, 253 AD2d 754, 755 (2d Dept 1998), the Court instructed that once a dissolved corporation has been reinstated, "corporate transactions which occurred during a period of dissolution are retroactively validated because the corporation's status, and its corresponding powers, rights, duties, and obligations, have been reinstated nunc pro tunc . . ." See Propp v Chaya Amusement Corp., 155 AD2d 251 (1st Dept 1989); Bensonhurst Real Estate, Ltd. v Helsam Realty Co., Inc., 1 AD3d 302 (2d Dept 2003).
Upon Adar's March 4, 2005 revival as a corporate entity, it had to change its name because the previous name, 26 Adar N.B. Corp. was taken during its period of dissolution by a Schoharie County corporation, on April 4, 2001 [exhibit C of motion]. On March 4, 2005, with its annulment of dissolution, the former 26 Adar N.B. Corp. filed a certificate of amendment to its November 24, 1989-certificate of incorporation, changing its corporate name to "Nachman Brach Inc." Thus, the Adar corporate entity continues to exist, but under its new name. The case can go forward with "26 Adar N.B. Corp." changed to "Nachman Brach Inc. f/k/a 26 Adar N.B. Corp." in the caption.
However, in the interest of not wasting plaintiffs' "scarce resources," this Court will wait for the Appellate Division's determination of defendants' appeal of my April 19, 2005 decision and order. If the decision and order is affirmed, I will allow 90 days for further discovery and then an additional 30 days for the filing of a note of issue and certificate of readiness. With discovery not completed, the January 26, 2006 note of issue and certificate of readiness filed by defendants' counsel is vacated forthwith.
Conclusion
Accordingly, it is
ORDERED, that the caption of this instant action is amended to:
_________________________________________________
CONGREGATION YETEV LEV D'SATMAR, INC.,
LUDOVICK WEISZ and JACOB SCHONFELD,
Plaintiffs,
- against - Index No. 13224/90
NACHMAN BRACH INC. f/k/a 26 ADAR N.B. CORP., [*6]
CONGREGATION BETH JOEL, BETH FEIGE, INC.,
NACHMAN BRACH and BAY RIDGE FEDERAL
SAVINGS AND LOAN ASSOCIATION,
Defendants.
_________________________________________________
and it is further
ORDERED, that the note of issue and certificate of readiness filed by defendants on January 26, 2006 is vacated forthwith; and it is further
ORDERED, that all outstanding discovery in the instant action must be completed within 90 days after plaintiffs' counsel serves a copy of the notice of entry of this decision and order upon counsel for defendants; and it is further
ORDERED, that the due date for a new note of issue and certificate of readiness is 120 days after plaintiffs' counsel serves a copy of the notice of entry of this decision and order upon counsel for defendants.
This constitutes the Decision and Order of the Court.
E N T E R
__________________________
HON. ARTHUR M. SCHACK
J. S.C.
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