TPG Architecture, LLP v Cotter

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TPG Architecture, LLP v Cotter 2012 NY Slip Op 32023(U) February 21, 2012 Sup Ct, NY County Docket Number: 104626/2011 Judge: Lucy Billings 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. SCANNED ON 8121201 [* 1] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART Index Number. I046261201 1 46 INDEX NO. TPG ARCHITECTURE LLP vs. COTTER, JOSEPH MOTION DATE MOTION 8EQ. NO. SEQUENCE NUMBER : 002 DISMISS pon the foregoing paperq, It Is ordered t h a t $ b k m t W A I. CHECK ONE: ..................................................................... 2. CHECK AS APPROPRIATE: 3. .............. MOTION IS: CHECK IF APPROPRIATE: ................................................ CASE DISPOSED GRANTED mENIED SETTLE ORDER 0DO NOT POST ~NOFJ-FINAL DISPOSITION 0GRANTED IN PART 0OTHER SUBMIT ORDER FIDUCIARY APPOINTMENT 0REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 46 -X _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I _ _ _ _ _ _ _ _ _ TPG ARCHITECTURE, LLP, and TPG LONG ISLAND, LLC, Index No. 104626/2011 Plaintiffs DECTSION AND ORDER - against - JOSEPH COTTER and LYNNE M. WARD, Defendants LUCY BILLINGS, J . S . C . : Plaintiffs adequately plead claims of participation in fraudulent conveyances from iPark Holdings LLC, which unjustly enriched defendants. In sum, Plaintiffs allege that iPark Holdings, having received plaintiffs architectural services, and defendants, iPark Holdings co-owners, having received plaintiffs billa for those services, divested iPark Holdings of its s o l e asset and divided the proceeds between defendants without paying iPark Holdings debt to plaintiffs. Although iPark Holdings may have received fair market value f o r the asset sold, iPark Holdings received nothing, and defendants exchanged nothing, according to plaintiffs, for iPark Holdings distribution of the sale s proceeda to defendants. As plaintiffs further allege, defendants used their total control over iPark Holdings to divert to themdelves the proceeds that, in part, iPark Holdings o w e d to plaintiffs. Defendants carried out this conveyance, moreover, after plaintiffs had commenced an action against iPark Holdings f o r payment of the debt. tpgarch.140 1 [* 3] These alleged facts set forth claims that defendants violated New York Debtor and Creditor Law (DCL) 5 5 2 7 3 , 2 7 3 - a , and 2 7 6 , by engaging in conveyances to themselves, without their payment of fair consideration to the transferor and rendering it insolvent, while plaintiffs maintained a pending claim on which t h e y recovered a judgment against the transferor. 2 7 0 , 271(1), 2 7 2 . See DCL §§ Claims pursuant t o DCL 5 5 2 7 3 and 273-a do not require pleading or proof of actual intent to defraud the creditor. Atsco Ltd. v. Swans=, 2 9 A.D.3d 4 6 5 Wall St. A ~ S O . v. BrodRkv, 2 5 7 A.D.2d 5 2 6 , C 528 (1st Dep t 2006); (1st Dep t 1 9 9 9 ) ; Matter of $ t e ele, 8 5 A.D.3d 1 3 7 5 , 1 3 7 6 - 7 7 (3d Dep t 2 0 1 1 ) ; Fischer v , $adov Realty Corp., 3 4 A . D . 3 d 6 3 2 , 6 3 3 (2d Dep t 2006). A claim pursuant to DCL 5 2 7 3 requires pleading and proof o n l y that the conveyance (1) was without fair consideration and (2) depleted iPark Holdings of its assets. 320 W. 13th St., LLC v. Wolf Shevack, Inc., 85 A.D.3d 629 (1st Dep t 2011); Wall St. Assoc. v , Brodsky, 2 5 7 A . D . 2 d at at 1 3 7 6 - 7 7 ; Murin v. Est1034-35 ( 3 d Dep t 2006). 528; Matter of Steele, 8 5 A.D.3d o f Schwaleq, 31 A.D.3d 1 0 3 1 , 1032, A claim pursuant to DCL § 2 7 3 - a requires pleading and proof that (1) plaintiffs already had sued iPark Holdings when it conveyed its assets; ( 2 ) the conveyance was without fair consideration; and ( 3 ) iPark Holdings has failed to pay the judgment in plaintiffs favor. 3 2 0 W , 13th St., LLC v. Wolf Shevack, Inc,, 8 5 A.D.3d 6 2 9 ; ConstitutiQp Realty v . Oltamh, 309 A.D.2d 7 1 4 , 7 1 5 (1st Dep t 2 0 0 3 ) ; COY le v. Lefkowitz, 8 9 A.D.3d 1 0 5 4 , 1 0 5 6 - 5 7 ( 2 d Dep t 2 0 1 1 ) ; Kreisler Borq tpgarch.140 2 [* 4] Florman Gen. Coqstr. Co., I n c . v , Tower $6, LLC, 58 A.D.3d 694, (2d Dep't 2009). 695 Plaintiffs' allegations that defendants, while plaintiffs' action against iPark Holdings w E pending, conveyed to at themselves, through their total control of iPark Holdings, the proceeds of itB sale of its property, without consideration to iPark Holdings and leaving it insolvent, aatisfies both DCL and DCL 5 273-a. § 273 The alleged (1) close relationship between iPark Holdings and defendants, irregular conveyance, out of (2) the ordinary course of business, (3) lack of consideration, (4) knowledge of the debt to plaintiff, and ( 5 ) consequent inability of iPark Holdings to pay the debt also raise an inference of defendante' fraudulent intent, sustaining plaintiffs' claim under DCL 5 276. 629; 320 W. 13th St., LLC v. Wolf Shevack, Inc,, 85 A.D.3d A t s w Ltd. v. S w a q w m , 29 A . D . 3 d Brown, 21 A.D.3d 845, 847 (1st Dep't Brodsky, 257 A.D.2d at 529. at 4 6 5 - 6 6 ; 2005); Shisqal v. Wall St. ASSOC. V. More particular facts, such as the details of iPark Holdings' liquidating transfers to each defendant, may be gleaned through demands for a bill of particulars and disclosure. F,q., Shisqal v. B r o w n , 21 A.D.3d 847; S e r i o v. Rhulen, 24 A.D.3d 1 0 9 2 , 1094-95 (3d Dep't 2005). rn P l d eman 93 (2008); v. Northern Leasinq S w . , 5 n c . , 10 N.Y.3d 4 8 6 , Oster v. Kirschner, 77 492- A.D.3d 51, 5 5 ( 1 s t Dep't 2010). These facts also state a claim for unjust enrichment: that defendants w e r e enriched at plaintiffs' expenee, and it is inequitable and unconscionable to allow defendants to retain the tpgarch.140 3 [* 5] enrichment. Mgndarin Tradinq Ltd . v. WildenRtein, 16 N.Y.3d at 182; Georqia Malone & Co,, Inc. v . Rider, 86 A.D.3d 406, 408 (1st Dep't 2011); Abacus Fed. Sav, Bank v. Lim, 75 A.D.3d 472, 473 (1st Dep't 2010). Although plaintiffs originally provided the benefits of plaintiffs' services to iPark Holdings, it, through defendants, then conveyed the fruits of those services and benefits to defendants. Finally, while defendant Ward raises the defense of lack of personal jurisdiction over her, she does not dispute keys facts on which jurisdiction rests. She carried out the conveyance that plaintiffs allege was fraudulent in New York and thus committed an alleged tort in New York. UPElt ate C.P.L.R. 5 302(a)(2); SPCA of N.Y. v. Arne rican W Q ~ kinq Collie Aesp., 18 N.Y.3d 400, 4 0 3 : (2012); CIBC Mellon T r u s t Co. v . HSBC Guverzellw Bank AG, 56 A.D.3d 307, 308-309 (1st Dep't 2008). & Pramer S.C.A. v. Abaplus Intl. Corp., 76 A.D.3d 89, 97 (1st Dep't 2 0 1 0 ) ; PT. B w k Mizuho Indonesia v , PT. Indah Kiat P u l p , 25 A . D . 3 d 470 (1st Dep't 2006). Plaintiffs' claims against her arise from the various buainess transactions she carried out in New York. C.P.L.R. 5 302(a) ( 1 ) . Specifically, during 2001 through 2006 s h e worked in New York on iPark Holdings' behalf, hiring plaintiffs to perform architectural services to improve iPark Holdings' sole asset, real property in Lake SucceBs, New York, and executing the contract to sell that p r o p e r t y to an entity in New York, These continuous and purposeful activities, all closely related to t h e parties' business together, confer jurisdiction over Ward under tpgarch.140 4 [* 6] C.P.L.R. § § 301 and 302(a). 380, 3 8 4 - 8 5 Fischbarq v, Doucek, 9 N.Y.3d 375, (2007); LaMarca v . Pak-Mor Mfq. Co . , 9 5 N.Y.2d 2 1 0 , 216-17 ( 2 0 0 0 ) ; Kaczorowaki v, Black & A d a m s , 2 9 3 A.D.2d 3 5 8 (1st Dep t 2002); Colucci Dep t 1996). & Umans v. 1 Mark, Inc,, 224 A.D.2d 243 (1st See SPCA of Upstate N.Y. v. American WQrkinq Collie Assn,, 18 N.Y.3d at 404-405; Pramer S . C . A . v. AbapLus Intl. C Q r p . , 76 A.D.3d at 9 5 - 9 6 ; Copp v. Ramirez, 62 A.D.3d 23, 30-31 (1st Dep t 2 0 0 9 ) ; PT. Bank Mimho Indpnesia v , PT. Indah K i a t Pulp, 2 5 A.D.3d at 4 7 0 - 7 1 . For each of the above reasons, the court denies defendants motion to dismias the amended complaint or for a more definite statement in plaintiffs pleading. (7). C.P.L.R. § 3211(a) ( 2 ) and As currently pleaded, the amended complaint specifies claims f o r a fraudulent conveyance and f o r u n j u s t enrichment as delineated above and requires no more particularized statements within the pleading itself. See C.P.L.R. § 3024(a); DCL §§ 273, 273-a. Plaintiffs allegations relating to the requirements for personal jurisdiction over defendant Ward are largely undisputed and provide ample bases for jurisdiction over her. C.P.L.R. 301, 3 0 2 ( a ) (1) and ( 2 ) . DATED: February 21, 2012 / W q s F I L E D LUCY BILLINGS, J.S.C. AUG 0 1 2012 NEW YORK COUNTY CLERKS OFFICE tpgarch.140 5 §§

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