Gas 110, LLC v Fwevents Corp.

[*1] Gas 110, LLC v Fwevents Corp. 2014 NY Slip Op 51122(U) Decided on July 24, 2014 Supreme Court, Suffolk County Mayer, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 24, 2014
Supreme Court, Suffolk County

Gas 110, LLC, Plaintiff(s),

against

Fwevents Corp., and Hauppauge Properties, LLC, Defendant(s).



19217-2013



Vincent J. Trimarco, Jr., PC

Attorneys for Plaintiff

1038 W. Jericho Turnpike

Smithtown, New York 11787

Ralph Fresolone, Esq.

Attorney for Defendant

235 Brooksite Drive

Smithtown, New York 11787
Peter H. Mayer, J.

UPON DUE DELIBERATION AND CONSIDERATION BY THE COURT of the foregoing papers, the motion is decided as follows: it is

ORDERED that the motion (001) by Order to Show Cause of the plaintiff, which seeks an order, inter alia, restraining the defendants from entering into a new, revised lease agreement [FN1] for the property located at 573 Nesconset Hwy., Hauppauge, New York, and restraining defendant FWEVENTS CORP. from selling, transferring, removing or altering the property, fixtures and equipment at the subject location, is hereby denied in all respects and any temporary restraining orders against the defendant are hereby vacated; and it is further

ORDERED that counsel for the defendant shall promptly serve a copy of this Order upon counsel for the plaintiff via First Class Mail, and shall promptly thereafter file the affidavit of such service with the County Clerk.

In support of the plaintiff's motion seeking a preliminary injunction, counsel asserts that plaintiff "has brought an action against the Defendants for Breach of Contract, Fraud, Conspiracy, and Tortuous [sic] Interference" and that the "subject of the action is a Consulting Agreement and Promissory Note entered into between Plaintiff and Defendant FWEVENTS." Defendants' counsel affirms, however, that plaintiff's application for injunctive relief is "fatally defective because there has been no action commenced by the Plaintiff concerning any claims of violation of the plaintiff's rights regarding the enforcement of the promissory note . . . ." In this regard, plaintiff has not submitted with its motion a copy of a summons and complaint. Furthermore, the Court's review of the minutes for this matter on the official website for the Suffolk County Clerk reveals that no summons and complaint, answer or any other pleadings have been filed with the Clerk.

In relevant part, CPLR §6301 sets forth the grounds for a preliminary injunction as follows:

A preliminary injunction may be granted in any action where it appears that the defendant threatens or is about to do, or is doing or procuring or suffering to be done, an act in violation of the plaintiff's rights respecting the subject of the action, and tending to render the judgment ineffectual, or in any action where the plaintiff has demanded and would be entitled to a judgment restraining the defendant from the commission or continuance of an act, which, if committed or continued during the pendency of the action, would produce injury to the plaintiff (emphasis added).

It is axiomatic that a preliminary injunction is only available in a pending action (Happy Age Shops, Inc. v Matyas, 128 AD2d 754, 513 NYS2d 710 [2d Dept 1987]). Accordingly, where the plaintiff moves by order to show cause for a preliminary injunction before jurisdiction over a defendant is established in a pending action, a motion for an injunction must be denied (id.). The law is well established that unless there is an underlying action which confers statutory authority on the court to grant a preliminary injunction, the court has no jurisdiction to award such relief (Hart Island Committee v Koch, 150 AD2d 269, 541 NYS2d 790 [1st Dept 1989]; Caruso v Ward, 146 AD2d 486, [*2]536 NYS2d 447 [1st Dept 1989]). The valid commencement of an action is a condition precedent to the court's acquiring the jurisdiction even to entertain an application for a preliminary injunction, and a motion for a preliminary injunction should be denied where personal jurisdiction has not been obtained over a defendant (id.; Sibley v Lake Anne Realty Corp., 136 AD2d 619, 523 NYS2d 865 [2d Dept 1988]).

Since plaintiff has failed to show, beyond general assertions, that an action was commenced prior to submission of plaintiff's Order to Show Cause, preliminary injunctive relief in favor of plaintiff must be denied. Even if plaintiff had commenced a prior action, the facts of this matter would, nevertheless, warrant denial of plaintiff's motion for a preliminary injunction.

It is well established that to prevail on a motion for preliminary injunctive relief, the moving party must demonstrate: (1) a likelihood of ultimate success on the merits; (2) the prospect of irreparable injury if the provisional relief is withheld; and (3) a balance of equities tipping in the moving party's favor (CPLR 6311; Matter of Related Properties, Inc. v Town Board of Town/Village of Harrison, 22 AD3d 587, 802 NYS2d 221 [2d Dept 2005]; Town of Goshen v Serdarevic, 17 AD3d 576, 793 NYS3d 485 [2d Dept 2005]); Doe v. Axelrod, 73 NY2d 748, 536 NYS2d 44 [1988]); Family Affair Haircutters v Detling, 110 AD2d 745, 488 NYS2d 204 [2d Dept 1985]). The decision to grant a preliminary injunction is committed to the sound discretion of the court, as the remedy is considered to be a drastic one (Bergen-Fine v Oil Heat Institute, Inc., 280 AD2d 504, 720 NYS2d 378 [2d Dept. 2001]); Doe v Poe, 189 AD2d 132, 595 NYS2d 503 [2d Dept 1993]).

Preliminary injunctions should be issued cautiously and in accordance with appropriate procedural safeguards, since they prevent litigants from taking actions that they are otherwise legally entitled to take in advance of adjudication on merits (Uniformed Firefighters Assn. v New York, 79 NY2d 236, 581 NYS2d 734 [1992]). With respect to a showing of success on the merits, to sustain this burden the movant must demonstrate a clear right to relief that is plain from the undisputed facts (Blueberries Gourmet, Inc. v Aris Realty Corp., 255 AD2d 348, 680 NYS2d 557 [2d Dept 1998]; Family Affair Haircutters v Detling, 110 AD2d 745, 488 NYS2d 204 [2d Dept 1985]). The burden of showing that an undisputed right exists rests upon the movant (Doe v Poe, 189 AD2d 132, 595 NYS2d 503 [2d Dept 1993]). When there is no likelihood that a movant will succeed on the merits of its underlying petition, it is provident for the court to deny the movant's motion for a preliminary injunction (see CPLR 6311; Doe v. Axelrod, 73 NY2d 748, 536 NYS2d 44 [1988]; Sheffield Towers Rehabilitation & Health Care Ctr. v Novello, 293 AD2d 182, 741 NYS2d 103 [2d Dept 2002]; Mosseri v Fried, 289 AD2d 545, 735 NYS2d 794 [2d Dept 2001]).

In this matter, the plaintiff alleges that plaintiff and defendant FWEVENTS CORP. entered into a consulting agreement for certain services to be provided by the plaintiff in exchange for the sum of $50,000.00, which is evidenced by a Promissory Note in favor of plaintiff. According to the plaintiff, the collateral for the Note is the lease agreement between the defendants for the premises located at 573 Nesconset Hwy., Hauppauge, New York. Plaintiff claims that the lease agreement was assigned by FWEVENTS to the plaintiff as collateral in the event FWEVENTS default on the Promissory Note. A provision in the Promissory Note states in bold print that the "Assignment shall [*3]only be deemed effective in the event of an uncured default on the part of [FWEVENTS CORP.]."

Here, the plaintiff speculates that "[u]pon information and belief, the Defendants have shown an intention to defraud the Plaintiffs [sic] . . ." and "[u]pon information . . . it is the intention of [the defendants] to orchestrate a default under the lease agreement thereby destroying the collateral of the Promissory Note . . ." In plaintiff's motion papers, however, plaintiff readily acknowledges that "Defendant is not currently in breach of the Promissory Note" and that "FWEVENTS has been making the minimum payments due to [plaintiff] under the promissory note." Furthermore, since there is admittedly no "uncured default" by FWEVENTS, the assignment of the lease to the plaintiff (and any rights plaintiff may have thereunder) cannot be deemed effective.

Accordingly, even if plaintiff had an action pending at the time injunctive relief was sought, from the undisputed facts, plaintiff has failed to sustain its burden of demonstrating a clear right to injunctive relief, and failed to show its likelihood of success on the merits (Blueberries Gourmet, Inc. v Aris Realty Corp., 255 AD2d 348, 680 NYS2d 557 [2d Dept 1998]; Doe v Poe, 189 AD2d 132, 595 NYS2d 503 [2d Dept 1993]; Family Affair Haircutters v. Detling, 110 AD2d 745, 488 NYS2d 204 [2d Dept 1985]). Therefore, based upon the foregoing, the plaintiff's motion for a preliminary injunction is denied in all respects, and any temporary restraining orders or stays are hereby vacated.

This constitutes the Decision and Order of the Court.

Dated:July 24, 2014

PETER H. MAYER, J.S.C. Footnotes

Footnote 1:Plaintiff has not submitted a copy the underlying lease agreement referred to in plaintiff's motion papers.