Rustic Acres Rod & Gun Club Inc. v Conwell

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Rustic Acres Rod & Gun Club Inc. v Conwell 2012 NY Slip Op 30372(U) January 31, 2012 Supreme Court, Nassau County Docket Number: 15257/11 Judge: Karen V. Murphy Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] Short Form Order SUPREME COURT - STATE OF NEW YORK TRIAL TERM. PART 11 NASSAU COUNTY PRESENT: Honorable Karen V. Murphy Justice of the Supreme Court RUSTIC ACRES ROD AND GUN CLUB INC., Plaintiff(s ), Index No. 15257/11 Motion Submitted: 12/9/11 Motion Sequence: 001, 002 -againstHENRY CONWELL, JR. and NEIL ClAMP A, Defendant(s). The following papers read on this motion: Notice of Motion/Order to Show Cause........................ Answering Papers.......................................................... Reply............................................................................. . Briefs: Plaintiff' s/Petitioner ' s........................................ Defendant' s/Respondent' s................................. . Plaintiff Rustic Acres Rod and Gun Club , Inc. moves by order to show cause for a preliminar injunction (1) removing the defendants Henr Conwell , Jr. , and Neil Ciampa from their positions as officers of the plaintiff; (2) directing defendant Henry Conwell , Jr. , to account for monies he has collected on behalf ofthe corporation; and (3) and ordering the defendants to turn over books and stated records ofthe plaintiff corporation , as well as those relating to a certain limited liabilty company formed by the defendants , to persons whom the plaintiff contends are now its duly elected officers. inter alia: inter alia move by cross motion Defendants Henry Conwell , Jr. 3212 for summary judgment dismissing the complaint. , and Neil Ciampa pursuant to CPLR [* 2] charter The defendants Neil Ciampa and Henry Conwell, Jr. , assert that they are " , Rustic Rod and Gun Club members and officers of the plaintiff, not- for profit corporation Inc. ("the Club" or "the plaintiff' ), al0-member , hunting and fishing club which owns , two For the past several years , however propert in Delaware County, New York. dispute with antagonistic member factions have engaged in an increasingly contentious One member group is respect to the operation and management of the ten-member Club. , effectively controlled the Club currently headed by the two defendants who have with others objecting group is comprised of since their alleged election as officers in 1995. The other " " (non-voting/non-equity) members newer members , described by the defendants as " regular claim are the defendants ' autocratic and unilateral who are dissatisfied with what they leadership practices. In September of20 11 , after the defendants allegedly declined to satisfactorily account , the to the objecting Club members and/or to produce certain corporate books and records objecting faction scheduled a member meeting and conducted new elections. Among other business conducted , the objecting faction elected a new slate of officers drawn from their own ranks , including a president , a secretary and a treasurer. s By- Laws: (1) only Notably, and pursuant to the relevant provisions of the Club' , VII (B)); and (2) officer charer members are permitted to vote for officers (By-Laws Ar. , VII (B)). With respect to terms are limited to a prescribed term of one year (By- Laws Art. the those By- Law provisions governing elective terms , the Club contends that the defendants , nor that they were duly have not established that they were duly elected at the 1995 election re-elected at any specific point after the 1995 elections. , the Club moved by In November of 2011, and at the direction of its new officers , including a mandatory-type order to show cause for inter alia pre-answer provisional relief injunction removing the defendants Ciampa and Conwell from their respective offices of 714Icf). (see , N- president and treasurer PCL defendants to The Club' s order to show cause also demands relief directing the produce the Club' s books and records; requiring defendant Conwell to account to the Club for monies he has allegedly collected and retained; and further relief directing the defendants by the defendants in to surrender the books of a certain limited liabilty company formed s propert. 2008 to exploit certain oil and gas mineral resources discovered on the Club' Upon initially considering the Club' s order to show cause , Justice Winslow ordered , but otherwise declined the defendants to produce the Club' s books and records to the Court with the to award the plaintiff any additional relief. The defendants have since complied Court' s directive. [* 3] Contemporaneously with the service of its order to show cause , the Club also commenced the within plenary action as against the defendants Ciampa and Conwell. The Club' s verified complaint contains two causes of action; the first alleges that the defendants have inter alia refused to turn over books and records and declined to provide an accounting of money collected by co- defendant Conwell on behalf ofthe Club; while the second cause of action alleges that the defendants breached their fiduciary duties to the Club by usurping a corporate opportunity arising out of the discovery of oil and gas deposits on the Club' s propert in 2008. There is no cause of action , however , predicated on the theory the defendants should be removed as Club officers - relief which was affirmatively sought 714Icf). (see , Nin the Club' s order to show cause PCL The remaining branches of the Club' s motion for a preliminar injunction are now before the Court for review and resolution. The defendants have cross moved for summary judgment dismissing the complaint. The parties ' respective applications should be denied. The purpose of a preliminary injunction is to maintain the status quo , not to determine the ultimate rights of the parties (Matter ofWheaton/TMW Fourth Ave., LP see 2d 41 (2d Dept. New York City Dept. of Bldgs. 65 A. D.3d 1051 , 886 N. Board of Managers of Wharfs ide Condominium v. Nehrich 73 A. D.3d 822 , 900 N. Masjid Usmf!n, Inc. v. Beech 140, LLC 68A. D.3d 942 892 N. 430 (2d Dept. , 2009)). To establish entitlement to that relief, a movant must clearly demonstrate (1) a likelihood of success on the merits , (2) irreparable injury absent granting (Aetna ofthe preliminar injunction , and (3) a balancing of the equities , in the movant' Doe v. 2d 860 , 552 N. 2d 166 , 552 N. Ins. Co. v. Capasso 75 N. Axelrod 73 N. 2d 748 532 N. 2d 1272 536 N. (1988);Perpignan v. Persaud, 306 Rutledge, LLCv. City of New York , 2012 WL 89602 (2dDept. D.3d Dover Gourmet Corp. v. Nassau 90 A. D.3d 1026 , 2011 WL 6825921 (2d Dept. 2d 574 (2d Dept. , 2011)). Health Care Corp. 89 A. D.3d 979 933 N. , 2009) 747 (2dDept., 20 10); s favor 2d 918 (1990); 2d44 , 2012); , 2011); the drastic remedy of a preliminary injunction must establish a clear right to that relief under the law and the undisputed facts (Radiology Associates of Poughkeepsie, PLLC v. Drocea 87 A. D.3d 1121 , 930 N. S.2d 594 (2d Dept. , 2011); 2d 726 (2d Dept. Omakaze Sushi Rest., Inc. v. Ngan Kam Lee 57 A. D.3d 497 868 N. 2008)). Notably, a mandatory injunction which is used to compel the performance of an act. . . is an extraordinary and drastic remedy which is rarely granted and then only under unusual circumstances where such relief is essential to maintain the status quo pending trial 2d610 (2dDept. ofthe action (Matos v. City of New York 21 A. D.3d 936 , 937 801 N. 2005); Rosa Hair Stylists v. Jaber Food Corp. 218 A.D. 2d 793 , 794 (see also, St. Paul A part seeking ," [* 4] Fire Mar. Ins. Co. v York Claims Serv. 308 A. 2d 347 , 348 , 765 N. 2d 573 Dept. 2003)). The decision to grant or deny a preliminar injunction rests in the sound discretion (Rowland v. Dushin 82 A. D.3d 738 , 739 , 917 N. 2d 702 (2d see , Doe v. Axelrod, supra at 750). of the Supreme Court" Dept. , 2011) With these principles in mind , and upon the conflicting allegations advanced at this early juncture of the proceeding, the Court agrees that the Club has not established a clear right to the relief sought 670 , (2d Dept. , 2011); (Cooper v. Board of White Sands Condominium 89 A. D J d 669 Rowland v. Dushin , supra). Preliminarily, the Club' s request , in effect, for a pre- discovery, mandatory injunction removing the defendants as corporate officers pursuant to N- PCL ~ 714(c), has been improperly demanded in its own name , rather than by the aggrieved shareholders as prescribed by N- PCL ~ 714(cJ). In any event , in opposing the motion , the defendants have raised questions with respect to inter alia whether the member meetings noticed by the objecting shareholders were conducted in accord with the governing by(e. , N-PCL Laws , Ar. VI); whether one of the positions purportedly filled was even B 711) (Byauthorized by Club' s applicable by- laws (By- Laws , Ar. VIII (B); Ar XI); and whether the objecting members are , in fact charter " members entitled to schedule meetings and/or vote in the Club' s elections (By- Laws , Ars. , III (A), VII , VIII (B); XVI (A), (BJ). laws Under these circumstances , the Club has failed to sustain its burden of demonstrating entitlement to the relief sought , branches of which , it should be noted , appear to represent (Board of Managers of Wharfs ide Condominium v. Nehrich 73 A. DJd 822 , 823- 824 , 900 N. 2d 747 (2d Dept. , 2010); Wheaton/TMW Fourth Ave. , LP v. New York City Dept. ofBldgs., supra; St. Paul Fire and Marine Ins. Co. v. York Claims Service, supra; see also, Cooper v. Board of White Sands Condominium, supra). portions of the ultimate relief requested in its complaint. Defendants cross-motion for summary judgment is denied. The thicket of opposing allegations advanced by the parties with respect to inter alia the defendants ' alleged failure to account and/or their handling of the Club' s mineral rights assets , cannot be conclusively resolved as a matter of law on the documents and other materials submitted. It also bears noting that unresolved questions also exist with respect to: (1) the application and import , if any, of certain By- Law provisions limiting officer elective terms to only one year; (2) which members of the Club are charter members , in that , while apparently never formally elected as " charter " members , they were treated as such , since they paid the " charter " member fee [* 5] ($3 000. 00) and then received stock certificates from the Club in return; and (3) which officers , if any, are duly elected. The Court has considered the parties ' remaining contentions and concludes that they do not warrant the granting of relief sought by the movants in their respective applications. Accordingly, it is ORDERED that Order to show cause by the plaintiff Rustic Acres Gun and Rod Club , Inc. for inter alia a preliminary injunction and related relief, is denied , and it is further that the cross motion pursuant to CPLR ~ 3212 by the defendants Henry Conwell , Jr. , and Neil Ciampa for inter alia summary judgment dismissing the complaint is denied. ORDERED A preliminar conference (22NYCRR 202. 12) shall be held at the Preliminary Conference Desk , in the lower level of the Nassau County Supreme Court , on the 7 March , 2012 , at 9;30 a. m. This directive with respect to the date of the conference is subject to the right of the Clerk to fix an alternate date should scheduling require. Counsel for the movant shall serve a copy of this Order on all parties. A copy of the Order with affidavits service shall be served on the DCM Clerk within seven (7) days after entry. The foregoing constitutes the Order of this Court. Dated: January31 2012 Mineola , N. ENTr: FEB 03 2012 NASSAU COUNTY COUNTY CLERK' OFFICE

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