Matter of Witham v Finance Invs., Inc.

Matter of Witham v vFinance Invs., Inc. 2008 NY Slip Op 05757 [52 AD3d 403] [52 AD3d 403] June 24, 2008 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected through Wednesday, August 13, 2008

In the Matter of James C. Witham, Respondent,
v
vFinance Investments, Inc., Appellant, et al., Respondent.

—[*1] Lax & Neville, LLP, New York (Jason Levine of counsel), for appellant.

Ganfer & Shore, LLP, New York (Mark A. Berman of counsel), for James C. Witham, respondent.

Order, Supreme Court, New York County (Richard B. Lowe, III, J.), entered November 28, 2007, which granted petitioner's motion for a preliminary injunction in aid of arbitration and directed him to post an undertaking in the amount of $37,500, and bringing up for review, pursuant to CPLR 5517 (b), an order, same court and Justice, entered December 18, 2007, which, upon petitioner's stipulation that the subject stock would not be removed from his account, adhered to the prior order insofar as the undertaking amount was fixed at $37,500, unanimously affirmed, without costs.

The preliminary injunction was not an improvident exercise of discretion. Because petitioner claims the right to retain ownership of shares in the company of which he is CEO and Chair of the Board, and because those shares would be sold without an injunction, "the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief" (CPLR 7502 [c]). Moreover, applying the traditional three-pronged analysis, petitioner showed a likelihood of success on the merits by showing that his claims have prima facie merit (see e.g. Trimboli v Irwin, 18 AD3d 866 [2005]), including a claim of fraud based on alleged misrepresentation of facts beyond mere intention not to perform on a contract (see First Bank of Ams. v Motor Car Funding, 257 AD2d 287, 291-292 [1999]). We also find that the motion court soundly exercised its discretion in concluding that petitioner faced irreparable harm and that the balance of the equities was in his favor. The undertaking, as effectively amended by petitioner's stipulation and the second order, was rationally related to the [*2]potential damages recoverable if the preliminary injunction is later determined to have been unwarranted (Kazdin v Putter, 177 AD2d 456 [1991]). Concur—Lippman, P.J., Tom, Gonzalez, Buckley and Catterson, JJ. [See 17 Misc 3d 1136(A), 2007 NY Slip Op 52306(U).]