Matter of Bella Benishai

Matter of Benishai 2004 NY Slip Op 08619 [12 AD3d 291] November 23, 2004 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected through Wednesday, January 19, 2005

In the Matter of Bella Benishai, Respondent-Appellant. Ilan Properties Inc. et al., Appellants-Respondents.

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Order, Supreme Court, New York County (William A. Wetzel, J.), entered October 10, 2003, which, in a proceeding for inspection of books and records against a corporation and its president, insofar as appealed from, granted petitioner's motion for summary judgment dismissing respondents' counterclaims seeking to recover loans made by the corporation to petitioner, and denied without prejudice petitioner's application to hold the individual respondent and his attorney in contempt, unanimously modified, on the law and the facts, to deny the motion for summary judgment dismissing respondents' counterclaims, and otherwise affirmed, without costs. Appeal from order, same court and Justice, entered May 12, 2004, which denied respondents' motion to renew the order dismissing their counterclaims, unanimously dismissed, without costs, as academic.

Issues of fact exist as to whether petitioner is personally indebted to respondent corporation. On the one hand, as the motion court stated, corporate documents that ought to reflect the alleged loans, such as its tax returns, mortgage and bankruptcy filings, do not. Indeed, the individual respondent himself acknowledged, in previous hearing testimony (see 303 AD2d 226 [2003]), that he was not aware of any documents evidencing the loans. Nevertheless, it is not true, as the motion court found, that there are no such documents. The dispute is between family members over the management of a family corporation founded by petitioner's husband and the individual respondent's father, and involves the effect of an agreement, and an addendum thereto, signed by petitioner individually and as administrator of her husband's estate. The main agreement requires petitioner to pay one of her children a sum of money drawn from the corporation's bank account in her capacity as administrator. However, the addendum does not refer to that role in requiring petitioner's payment of money to another child, raising an issue of fact as to whether the payment called for therein was to be made by petitioner individually, and, in turn, whether payments to that child by the corporation were made on petitioner's behalf. In addition, the corporation's general ledgers and balance sheets attached to petitioner's own motion [*2]papers contain entries of a loan due the corporation from petitioner in the amount of $1,163,950, close to the counterclaim figure of $1.15 million. It is not clear whether the loan referred to in these documents and the loans alleged in respondents' counterclaims are one and the same.

In view of the foregoing, the appeal from the order denying respondents' motion to renew is dismissed as academic.

Petitioner's contempt application was properly denied without prejudice, since the individual respondent's allegedly contemptuous issuance of corporate checks was done before the order appointing a receiver had gone into effect. Concur—Tom, J.P., Ellerin, Williams, Lerner and Catterson, JJ.