Sunset W. LLC v Sutphin Mgt. Corp

[*1] Sunset W. LLC v Sutphin Mgt. Corp 2009 NY Slip Op 51002(U) [23 Misc 3d 1129(A)] Decided on May 22, 2009 Supreme Court, Kings County Demarest, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 May 22, 2009
Supreme Court, Kings County

Sunset West LLC, Teserra LLC, and Westpan-Bowl LLC, Plaintiffs,

against

Sutphin Management Corp, and Robin Eshaghpour, Defendants.



27102/06



Attorney for Plaintiffs

Paul Golden, Esq.

Hagan, Coury & Associates

908 Fourth Avenue

Brooklyn, NY 11232

Attorney for Defendants

Claude Castro, Esq.

Castro & Karten, LLP

355 Lexington Avenue

New York, NY 10017

Carolyn E. Demarest, J.

Defendants Sutphin Management Corp. (Sutphin) and Robin Eshaghpour move pursuant to CPLR 5015(a)(3) to vacate the judgment entered against them on July 18, 2007, in favor or plaintiffs Sunset West LLC (Sunset), Teserra LLC (Teserra), and Westpan-Bowl LLC (Westpan) in the sum of $1,730,715.[FN1] For the reasons set forth below defendants' motion is denied.

Background

This case has a long and protracted procedural history culminating in what is now [*2]plaintiffs' third motion for contempt against defendant Eshaghpour and the second attempt by defendants to vacate a judgment entered almost three years ago. Defendant Robin Eshaghpour is a real estate entrepreneur and the principal of defendant Sutphin. On October 3, 2005, plaintiffs Sunset and Teserra jointly entered into a contract of sale with defendant Sutphin wherein Sutphin agreed to purchase two neighboring parcels of property located in Westhampton, New York for a total price of $8 million (the "Westhampton Properties"), one of which was owned by Sunset and the other by Teserra. Defendant Eshaghpour negotiated the agreement with George Pantelidis, the managing member of all of the LLC plaintiffs.[FN2] According to the terms of the contract, defendants agreed to a down payment of $10,000. In addition, section 41 of the contract contained a liquidated damages clause which provided that Sutphin would pay Sunset $1.6 million, twenty percent of the purchase price, in the event it failed to close on the properties. Defendant Robin Eshaghpour guaranteed $1.59 million dollars of that sum, that being the balance of the twenty percent after application of the $10,000 payment at contract signing (see prior decision of this Court dated June 20, 2007).

Defendants never closed on the property. Plaintiffs commenced this action in September 2006 and, in January 2007, plaintiffs moved for summary judgment claiming that they were entitled to liquidated damages under the contract of sale. Defendants opposed the motion and cross-moved to dismiss the complaint upon their contention that the liquidated damages provision constituted a penalty and was therefore unenforceable. On June 20, 2007, this Court rendered a written decision and order granting plaintiffs' motion and enforcing the liquidated damages clause. The Court held defendants liable for the $1.59 million dollars specified in the liquidated damages clause and, on July 18, 2007, a judgment in the amount of $1,730,715 (incorporating interest) was entered against defendants.

Defendants never satisfied the judgment and, in an attempt to learn more about the defendants' financial assets and ability to satisfy the judgment, plaintiffs served upon defendants an information subpoena. However, defendants never submitted complete answers to the subpoena and on January 11, 2008, plaintiffs moved to compel defendants' comprehensive response to the subpoena. That motion was resolved by order of this Court dated February 27, 2008 directing defendants to respond to the subpoenas by March 11, 2008. However, defendants again did not submit timely or adequate responses and plaintiffs moved by Order to Show Cause dated April 8, 2008 for contempt and to, once again, compel defendants' responses to the information subpoenas. Oral argument on that motion was held on May 7, 2008, and this Court, by written order of the same date, which incorporated the agreement of the parties, directed Eshaghpour to clarify his answers and appear for a deposition on June 9, 2008.

On May 7, 2008, Jack Glasser Esq., defendants counsel at the time, moved pursuant to CPLR 5015(a)(3) to vacate this Court's June 20, 2007 order as well as the July 13, 2007 judgment entered in the instant case against the defendants. That motion was originally returnable on May 21, 2008 but was adjourned to June 25, 2008. However, prior to oral argument on the motion to vacate, Mr. Glasser also moved, by Order to Show Cause dated June [*3]19, 2008, to be relieved as counsel. The return date on that motion was also set for June 25, 2008. Meanwhile, Eshaghpour once again submitted inadequate responses to the information subpoenas previously served on him and, as a result, plaintiffs moved by Order to Show Cause dated June 16, 2008 to compel defendants' complete responses and to hold Eshaghpour in contempt. The Court set the return date on the order to show cause for June 25, 2008 to coincide with the pending motions to vacate and withdraw as counsel.

On June 25, 2008 the Court heard oral argument on three pending motions in the instant case.[FN3] Motion sequence number four was the motion to vacate the June 20, 2007 decision and order and the July 18, 2007 judgment; motion sequence number five was the compel/contempt motion; and the motion to withdraw as counsel was motion sequence number six. Mr. Glasser's motion to withdraw was addressed first. In support of his motion, Mr. Glasser argued that the attorney-client relationship between himself and defendants had deteriorated and that there was no response to counsel's attempts to communicate. Plaintiffs' only opposition to the motion was to request that the Court not grant a 30-day stay of the action in light of the defendants' continuing lack of cooperation and the pending contempt motion. Recognizing that Mr. Glasser was no longer able to communicate with Eshaghpour, the Court relieved counsel but, due to Eshaghpour's continuous lack of compliance with the Court's orders, the Court did not stay the action.

The Court then turned to defendants' motion to vacate which was actually filed first in time and prior to counsel's motion to be relieved. In support of the motion, the defendants argued that judgment should be vacated because plaintiffs failed to disclose their receipt of a $250,000 "under the table" cash payment from Eshaghpour as downpayment on the contract. Defendants argued that plaintiffs' judgment was procured by fraud because they failed to disclose such information in their summary judgment motion. Despite having already relieved defendants' counsel, the Court questioned the attorney appearing on behalf of defendants and, particularly in light of the history of the case, found defendants' argument incredible. The motion to vacate was denied on the record.

Finally, upon plaintiffs' motion to punish for contempt, the Court directed defendants to respond to the information subpoenas previously served and appear for depositions. The order, to be served upon Robin Eshaghpour personally in hand, indicated that a failure to do so would result in penalties and/or the issuance of a warrant for his arrest upon the Court's finding that he was in contempt of prior court orders.[FN4]

By August 2008 Eshaghpour finally responded to the information subpoenas and the plaintiffs deposed him. At the deposition, Eshaghpour made reference to several documents and [*4]agreements that he did not produce at the deposition. Plaintiffs' attorney demanded that the judgment debtor produce the documents, but Eshaghpour did not produce the documents and was, therefore, served with a subpoena duces tecum dated November 14, 2008, for their

production.[FN5]

The subpoena required that the defendant respond by December 2, 2008. Consistent with prior behavior, Eshaghpour failed to reply to the subpoena. This precipitated yet another motion for contempt/to compel brought by Order to Show Cause dated December 5, 2008 which was partially resolved by written order dated December 10, 2008 directing defendants to respond to the November subpoena on or before January 8, 2009. The balance of the motion was adjourned to January 21, 2009.

The Instant Motions

On January 21, 2009, this Court heard oral argument on two open motions: the first was the balance of plaintiffs' motion for contempt and/or to compel; and the second was defendants' CPLR 5015(a)(3) motion to vacate the July 18, 2007 judgment. As to the contempt/compel motion, the Court decided on the record to hold that motion in abeyance pending the resolution of the instant motion to vacate.

In support of the instant motion to vacate, defendant Eshaghpour reiterates the same allegations he previously recited to this Court in support of his first motion to vacate judgment. According to Eshaghpour, in July or August of 2004 he spoke with George Pantelidis, the managing member of the owners of the Westhampton Properties, and began negotiating the purchase of the properties. At that time they could not agree on a price and the negotiations ceased. However, nearly a year later, in September 2005, negotiations resumed and Eshaghpour agreed to purchase the properties for the agreed price. On October 3, 2005, the parties, defendants' attorney, Stephan Siminou, Esq., and seller's attorney, Edward D. Fusco, Esq., met at Mr. Fusco's office for contract signing. [*5]

Eshaghpour claims that, at the meeting, Mr. Pantelidis demanded that Eshaghpour pay "$500,000 in cash at contract signing and an additional $500,0000 in cash at closing, as a condition for signing the contract" (Robin Eshaghpour Affidavit in Support ¶ 11). In addition, Eshaghpour claims that he overheard Pantelidis speaking to his brother Jimmy Pantelidis on the telephone saying that the cash payment would save the Pantelidis' a portion of the capital gains and transfer taxes due on the properties. Eshaghpour also explains that "[he] told [Pantelidis] that the most [he] could come up with in cash was $250,000.00 which [Eshaghpour] had saved over a 20 year period of time while [he] worked in [his] deceased father's liquor store" (Robin Eshaghpour Affidavit in Support ¶ 14). At that time, Pantelidis again conferred with his brother over the telephone and suggested that Eshaghpour pay the $250,000 in cash and sign a personal guarantee for 20% of the contract price. According to Eshaghpour, at that point his attorney, Mr. Siminou, indicated that he wanted no part of the transaction. Mr. Fusco allegedly tried to calm Siminou's fears by suggesting that he had no reason to be concerned about the cash transaction so long as he was not party to the exchange. Therefore, Fusco allegedly suggested that Pantelidis leave the meeting with "an executed draft" of the contract which did not reflect the $250,000 cash payment and arrange to meet Eshaghpour the next day to receive the cash payment before "delivering the contract" to Eshaghpour. Mr. Siminou strongly advised Eshaghpour against entering into such a transaction.

Notwithstanding his attorney's advice to the contrary, Eshaghpour signed the contract of sale and claims that he signed the separate Agreement for the lease of a bowling alley on the adjacent premises for $800,000 in order "to reduce the amount of the purchase price in an attempt to reduce their capital gains taxes, transfer taxes, and possibly prevent their partners' from knowing the full price of this transaction" (Robin Eshaghpour Affidavit in Support ¶ 18). Eshaghpour claims that, on the following day, George Pantelidis and Peter Pantelidis visited Eshaghpour and his wife, Elena, at their apartment and demanded the $250,000 in cash. Eshaghpour allegedly agreed to pay the amount and asked Elena to "lay this money on the table for George and Peter Pantelidis" to count (Elena Eshaghpour Affidavit in Support ¶ 4). The Pantelidis brothers allegedly took the cash yet, according to the Eshaghpours, refused to sign a receipt for payment and left the apartment stating that if Eshaghpour could come up with more cash they would make it "worth his while."

Sometime later Eshaghpour advised his attorney that he had engaged in the cash transaction against his advice. Mr. Siminou allegedly became very upset with Eshaghpour and advised him that "in the Hamptons there is a 2% transfer tax that the buyer is required to pay. Thus . . . if the Plaintiffs did not report this $250,000.00 cash payment on their transfer forms, [Eshaghpour] would not be able to declare the $250,000.00 cash payment as part of [the] purchase price on Sutphin's transfer forms since the purchase price would not match'" (Robin Eshaghpour Affidavit in Support ¶ 21). Eshaghpour claims that he then asked his attorney to contact Pantelidis' attorney about modifying the contract to reflect the $250,000 payment or to cancel the transaction. A meeting took place on or about February 22, 2006 but Fusco never agreed to modify the contract. Sometime thereafter, Siminou advised Eshaghpour to terminate the transaction and declined to further represent Eshaghpour.

Shortly after this litigation commenced, Eshaghpour claims that he retained Jack Glasser, Esq. to defend him in the action. Eshaghpour claims that, despite telling Mr. Glasser about the [*6]$250,000 cash down payment, Mr. Glasser decided to defend the action by arguing that "the 20% down payment on a real estate contract . . . is excessive and unenforceable." (Robin Eshaghpour in Support ¶ 24). In the instant motion defendants argue the Pantelidis' refusal to modify the contract to reflect the down payment and to report the $250,000 for tax purposes renders the contract illegal and warrants a vacatur of judgment.

Discussion

As a threshold matter, this Court must address its June 25, 2008 decision which denied defendants' first motion to vacate judgment. As discussed earlier, on that date this Court relieved defendants' previous counsel on the record but did not stay the action as required by CPLR 321. Instead, the Court continued to hear argument on defendants' motion to vacate judgment, which was not withdrawn by counsel, and denied the motion on the merits. Defendants correctly contend that once the motion to relieve was granted, this action should have been immediately stayed and that it was improper for this Court to consider the motion to vacate after relieving counsel. (See Welch Allyn, Inc. v Vail Tool Company, Inc., 219 AD2d 824, 825 [4th Dept 1995]; see also McGhee v McGhee, 263 AD2d 530 [2d Dept 1999][holding that it was improper to proceed to inquest immediately after granting former counsel's motion to withdraw without permitting a reasonable adjournment]). In light of this error, the appropriate course of action is to vacate the order denying defendants' previous motion and address the instant motion, which seeks the same relief, de novo, on its merits (See Welch Allyn, Inc., 219 AD2d at 825).

In their motion premised upon CPLR 5015(a)(3), defendants argue that the alleged $250,000 cash payment renders the contract of sale illegal and unenforceable because "the contract sought to be enforced by the plaintiffs in this action was designed to avoid payment of federal, state, and local income taxes, as well as state and local transfer taxes and federal and state capital gain taxes" (Castro Affidavit in Support ¶ 5) and warrants vacatur of judgment. CPLR 5015(a)(3) provides that the Court may vacate a judgment on the grounds of "fraud, misrepresentation, or other misconduct of an adverse party." As argued by plaintiffs, however, CPLR 5015(a)(3) requires the movant to articulate a fraud, not in the inducement of the agreement or the execution of the documents which form the basis for the complaint, but in the procurement of the judgment (See Fidelity New York, FSB v Hanover Companies, Inc., 162 AD2d 582, 583 [2d Dept 1990][upholding lower court's denial of defendants' motion to vacate judgment because defendants did not allege fraud in the procurement of judgment but with respect to the execution of the promissory notes which served as the basis for the complaint]; Marine Midland Bank v Hall, 74 AD2d 729 [4th Dept 1980]; see also In re Holden, 271 NY 212, 218 [1936]). While defendants seek to characterize plaintiffs' purportedly illegal purpose in demanding a cash payment from defendants as a fraud upon the Court in obtaining the judgment, such argument is unavailing. Defendants' motion does not articulate a fraud in the obtainment of judgment but, rather, an illegality in the underlying transaction, a defense that was available to them from the outset. Therefore, defendants fail to establish the kind of fraud contemplated by CPLR 5015(a)(3) and cannot succeed on their motion on the basis of illegality (Abacus Real Estate Finance Co. v P.A.R. Construction and Maintenance Corp., 128 AD2d 821 [2d Dept 1987]).

Furthermore, as argued by plaintiffs, defendants cannot avail themselves of CPLR 5015(a)(3) if the fraud alleged was discoverable, or if defendants had adequate opportunity to [*7]raise the issue, prior to judgment (Napoli v Napoli, 67 AD2d 941 [2d Dept 1979]; Tamimi v Tamimi, 38 AD2d 197, 200 [2d Dept 1979]). Defendants contend that the $250,000 under-the-table payment was made prior to commencement of this action. Eshaghpour claims that he told his prior counsel about the $250,000 cash payment, but that the attorney instead chose to defend the action on the basis that the liquidated damages clause amounted to an unenforceable penalty, a strategy that might have been intended to protect defendants from the consequences of their own willful participation in an unlawful scheme to defraud the government. In any event, this grievance, if justified, is more appropriately directed towards Mr. Eshaghpour's former attorney as CPLR 5015(a)(3) does not provide a basis to vacate due to attorney error or omission. Therefore, the motion to vacate pursuant to CPLR 5015(a)(3) is denied.

Moreover, the motion here not only fails to meet the criteria for vacatur pursuant to CPLR 5015(a)(3), but also must be denied as an improper attempt to renew and/or reargue the Court's determination upon plaintiffs' January 2007 motion for summary judgment which granted summary judgment in plaintiffs' favor by Order dated June 20, 2007. In support of their motion, plaintiffs claimed that they were entitled to liquidated damages because defendant Sutphin defaulted under the contract of sale by failing to close by the date specified in the agreement. The defendants cross-moved to dismiss, and, in opposition to the motion for summary judgment, attacked the validity of the underlying agreement by arguing that the liquidated damages clause was an unenforceable penalty because it amounted to 20% of the overall purchase price.[FN6] The Court found the underlying agreement valid and enforced the liquidated damages clause.

In the instant motion, defendants are once again attempting to attack the validity of the underlying agreement, but on a new theory of illegality. CPLR 2221(d)(2) provides that a motion to reargue must be "based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion." Thus, the instant motion does not qualify as one to reargue because the allegations regarding the $250,000 down payment constitute "matters of fact not offered on the prior motion" and defendants are not now claiming that the Court misapprehended or overlooked existing law when deciding the motion for summary judgment.[FN7]

On the other hand, CPLR 2221(e)(2) provides that a motion for leave to renew must be based upon "new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination."It would appear that defendants' motion is brought as one to renew as Eshaghpour never mentioned the $250,000 down payment in his opposition to plaintiffs' motion for summary judgment or in his own cross-motion to dismiss.

A renewal motion "must contain a reasonable justification for the failure to present such facts on the prior motion" (CPLR 2221[e][3]). Eshaghpour claims his former attorney, Jack Glasser Esq., was made aware of the $250,000 "under the table" payment prior to plaintiffs' motion for summary judgment, but decided not to raise the issue in opposition to the motion, [*8]opting instead to argue only that the liquidated damages clause was an unenforceable penalty. However, Eshaghpour had the opportunity to raise the alleged $250,000 down payment himself on at least two occasions prior to entry of judgment. In the Answer, verified by Eshaghpour, he does not mention the $250,000 and, instead, counterclaims for "the deposit under said contract of sale," demanding relief in the amount of $10,000 as specified in the contract of sale (Verified Answer ¶¶ 12, 14). Eshaghpour then himself submitted an affidavit in opposition to the summary judgment motion in which he detailed the events leading up to the underlying transaction and contract of sale. Nowhere in that affidavit did he allude to the $250,000 cash payment. In fact, in that affidavit, Eshaghpour states that he could not comply with Pantelidis' alleged demand for a "20% contract deposit," because he "only had available funds of $10,000." (Eshaghpour Affidavit in Support of Notice of Cross-Motion dated March 8, 2007 ¶¶ 7-8). Yet, he now claims that the $250,000 in cash was available to him at that time. In light of the fact that Eshaghpour had the opportunity to raise the $250,000 down payment in both his verified answer and this affidavit in opposition to summary judgment, the Court finds that defendants do not have a reasonable justification for not previously raising the $250,000 payment allegation. As a motion to renew, the motion is statutorily defective inasmuch as defendants have failed to present a reasonable justification for failing to raise the $250,000 payment at the outset of this litigation (see Yarde v New York City Transit Auth., 4 AD3d 352, 353 [2d Dept 2004][upholding lower court's decision to deny renewal motion where it was based on evidence that could have been presented earlier had due diligencebeen exercised]).

Finally, even if not procedurally defective, this motion would fail on the merits because, as plaintiffs contend, defendants have not adequately defined the illegality that arises from a $250,000 cash payment (see Lardiere v Choices Womens Medical Center, Inc., 7 AD3d 676 [2d Dept 2004][denying defendant's motion to dismiss because "it failed to show that . . . the object of the contract in question was illegal"). At oral argument, plaintiffs' counsel conceded, arguendo, for the purpose of this motion, that Eshaghpour made a $250,000 cash payment but argued that even if the cash payment was made, defendants have not established tax evasion. Indeed, it was only when pressed at oral argument that defense counsel anecdotally cited New York State Tax Law § 1818 [FN8] which merely states that a violation "of any provision of article thirty-one of this chapter" constitutes a misdemeanor. While Article 31 of New York State Tax Law contains numerous provisions dealing with real estate transfer tax, the alleged violation of the provision is, at best, speculative (See Estate of Ellington v American Society of Composers, Authors and Publishers, 25 AD3d 426 [1st Dept 2006][denying an illegality argument that was unsupported by proof of taxes owed]).

Furthermore, even if the plaintiffs failed to pay the applicable taxes, such illegality is independent of the contract's purpose (Hilgendorff v Hilgendorff, 241 AD2d 481, 482 [2d Dept 1997][denying illegality argument where the contract at issue was lawful but tax fraud was collateral to, and independent of, the contract's performance]; Sabia v Mattituck Inlet Marina and Shipyard, Inc., 24 AD3d 178, 179 [1st Dept 2005][holding that the very purpose of the contract must be to further an illegal purpose]). Here, there is no evidence that the very purpose of the contract of sale was to accomplish the illegal purpose of evading taxes or even that taxes were [*9]actually evaded. Therefore, the contract is not per se unenforceable based on illegality (Lardiere, 7 AD3d at 676; see also Murray Walter, Inc. v Sarkisian Brothers, Inc., 107 AD2d 173, 176 [3d Dept 1985]).

It is true that, as a general rule, contracts against public policy are illegal, void, and unenforceable, and courts will not recognize rights purportedly arising from them (see Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d 321, 327 [1999]; City of New York v 17 Vista Assoc., 84 NY2d 299, 306 [1994]; Szerdahelyi v Harris, 67 NY2d 42, 48 [1986]; McConnell v Commonwealth Pictures Corp., 7 NY2d 465, 469 [1960]). "However, [w]here contracts which violate statutory provisions are merely malum prohibitum, the general rule does not always apply. If the statute does not provide expressly that its violation will deprive the parties of their right to sue on the contract, and the denial of relief is wholly out of proportion with public policy * * * the right to recover will not be denied.'" (Lloyd Capital Corp. v Pat Henchar, Inc.,80 NY2d 124, 127 [1992] quoting Rosasco Creameries v Cohen, 276 NY 274, 278[1937]). A Court may not void a contract where "there are regulatory sanctions and statutory penalties in place to redress violations of law" (Lloyd Capital Corp., 80 NY2d at 127). Here, Tax Law §§ 1414 - 1417 provide numerous means for the attorney general to recover and penalize (both civilly and criminally) unpaid real estate transfer taxes. Therefore, contrary to defendants' argument, public policy does not dictate that the contract be voided on the basis of illegality.

Moreover, this Court will not allow defendant Eshaghpour to use the illegality, in which he was a knowing participant, as "a sword for personal gain rather than a shield for the public good" (Charlebois v Weller Assocs., 72 NY2d 587, 595 [1988]). Eshaghpour's transactional attorney, Stephen S. Siminou, admittedly implored Eshaghpour not to enter into the contract of sale when Pantelidis allegedly demanded the $250,000 cash down payment. Indeed, in support of the instant motion, Mr. Siminou submits an affidavit in which he recounts the negotiation stages of the contract and the numerous times he advised Eshaghpour not to go forward with the transaction once he learned of the $250,000 payment. Eshaghpour entered into the contract against the advice of his attorney, with knowledge that he was participating in a transaction which he now complains to be illegal. Those who come into Court seeking equitable relief from what they claim to be the illegal acts of others must themselves come into Court with clean hands, "free from the imputation of illegality in respect of the transaction of which they complain." (Wolfenstein v Fashion Originators' Guild of America, Inc., 244 AD 656, 660 [1st Dept 1935]). Even were this Court to credit defendants' illegality argument, defendants would not be relieved from the consequences of their contractual commitment because they knowingly participated in the alleged illegality and are equally culpable. This dispute concerns a fully executed written agreement which was not signed under duress or without advice of counsel. In its June 20, 2007 decision, this Court found the agreement valid and enforceable. Defendants had numerous opportunities to raise the defense of illegality based upon the alleged $250,000 payment, but chose not to do so until judgment had been entered and numerous contempt motions seeking to enforce that judgment had been made. There is no basis in law or equity to grant relief to defendants.

Conclusion

Defendants' motion to vacate judgment is denied. Defendants shall submit opposition to the remaining contempt motion and the outstanding motion in Index No. 27805/08, on or before June 22, 2009. Oral argument will be held on July 15, 2009. All parties are expected to appear on that date. If the parties have reached a resolution of the motions in the interim, they are directed to notify the Court.

This constitutes the decision and order of the Court.

ENTER

J. S. C. Footnotes

Footnote 1:Plaintiffs also have a pending motion for contempt brought by Order to Show Case dated December 5, 2008 which was returnable the same day as defendants' motion to vacate. At oral argument this Court held the motion in abeyance pending the outcome of defendants' motion to vacate judgment.

Footnote 2:Simultaneous with execution of the contract of sale, Westpan and Sutphin entered into a contract for the assignment of a lease for an adjacent bowling alley, to be closed for the sum of $800,000 upon the closing of sale on the other two properties.

Footnote 3:The transcript of June 25, 2008, indicates that a companion case brought against Robin Eshaghour's wife, Elena Eshaghpour, under index number 16573/08, seeking to punish her for contempt in failing to respond to an information subpoena served upon her, was also called into the record. That motion was granted, upon Elena's default, by written order dated July 14, 2008.

Footnote 4:The Court's oral decision on the contempt motion was memorialized in a written order dated July 14, 2008. In it the Court directed Eshaghpour to provide full and notarized responses to the information subpoenas previously served upon him by August 1, 2008, and appear for depositions on August 11, 2008 or a warrant would be issued for his arrest.

Footnote 5:Just prior to serving the November 14, 2008 subpoena, plaintiffs commenced another action against Mr. Eshaghpour, his wife Elena Eshaghpour and various entities owned by the Eshaghpours claiming that defendants had fraudulently transferred assets between the entities to evade judgment. Surprisingly, the new matter, Sunset West LLC v Robin Eshaghpour et al., Kings County Index No. 27805/08, was not immediately assigned to this Court but was referred to Justice Jacobson's non-commercial part even though the Request for Judicial Intervention listed this case, Kings County Index No. 27102/06, as a related matter and plaintiffs' counsel noted on the cover page of his motion "Respectfully refer to Hon. Demarest." The argument on the temporary retraining order contained in an Order to Show Cause dated October 8, 2008, was heard by Justice Francois Rivera who presided over the ex parte part on that day. At that time, plaintiffs' counsel asked Justice Rivera to refer the new matter to this Court. Despite his knowledge that Robin Eshaghpour was yet to comply with an outstanding order in the instant case, defendants' then and current counsel in both matters, Claude Castro, vigorously opposed the transfer of the action to this Court claiming that "the issues in the case are different . . . that case went to judgment, it's not active anymore, it's not considered a related case" (Oral Argument Transcript dated October 8, 2008 in Index No. 27805/08 at 5-6). As a result, Justice Rivera denied plaintiffs' transfer request and went on to deny plaintiffs' application for a temporary restraining order. The case was calendared in Justice Jacobson's part but Justice Jacobson transferred it to this part when it came to light that the two matters were very much related. On December 10, 2008, pending a full hearing on the Order to Show Cause, this Court issued a temporary restraining order preventing defendants from transferring any assets identified in the Order to Show Cause. Defendant's counsel was directed to submit opposition to the remainder of the motion by January 8, 2009 and the matter was adjourned to January 21, 2009 to be heard with the pending motions in this action.

Footnote 6:Defendants also claimed that plaintiffs' summary judgment motion was premature because there remained outstanding discovery requests and notices for plaintiffs' depositions.

Footnote 7:An appeal has been taken to the judgment entered upon this Court's June 2007 decision.

Footnote 8:This provision is not cited in the moving papers.