Jacobowitz v Jacobowitz

[*1] Jacobowitz v Jacobowitz 2004 NY Slip Op 51338(U) Decided on October 25, 2004 Supreme Court, Kings County 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 October 25, 2004
Supreme Court, Kings County

Moses Jacobowitz, The Xoom Realty Group, Inc., and Chase Realty Group, Inc., Plaintiff,

against

Mendal Jacobowitz a/k/a Meyer Jacobowitz,, Defendant.



16605/04

David B. Vaughan, J.

Upon the foregoing papers, plaintiffs Moses Jacobowitz (Moses), The Xoom Realty Group Inc. (Xoom), and Chase Realty Group Inc. (Chase) move, by order to show cause, for a preliminary injunction, pursuant to CPLR 6311, enjoining defendant Mendal Jacobowitz a/k/a Meyer Jacobowitz (Mendal or defendant), his employees, agents, representatives and those acting in concert with him ("the Enjoined Parties") from: (a) access to the premises at 155 South Second Street, 70 St. Nicholas Avenue, 350 Melrose Avenue and 353 Melrose Avenue, in Brooklyn, or any other properties in which plaintiff has an interest (the Properties); (b) acting to contact any tenants, employees, contractors or other persons related to the Properties; (c) interfering with the management and operation of the Properties, collection of rents from tenants, and/or the exercise of plaintiffs' right to manage and otherwise enjoy the ownership of the Properties; (d) transferring, conveying, mortgaging or encumbering any of the Properties; and (e) making alterations or physical changes to the Properties. Plaintiffs also request that their instant motion for a preliminary injunction be treated as a motion for summary judgment. Defendant opposes the instant motion and cross-moves for (1) [*2]the appointment of a receiver to operate and manage the Properties during the pendency of the instant action, and (2) a protective order precluding plaintiffs, their attorneys and anyone under their dominion or control from making any use whatsoever of a transcript of deposition testimony given by the defendant in a case currently pending in the United States Bankruptcy Court for the Eastern District of New York under Case No. 03-82321-511.

In the instant action, plaintiffs seek cancellation of four deeds to the Properties which were allegedly owned by plaintiffs and fraudulently transferred to defendant without any adequate consideration. Plaintiffs also seek a permanent injunction enjoining the defendant from holding himself out as the owner of the Properties, from denying the plaintiffs access to the Properties and from interfering with plaintiffs' contacts with tenants, employees, banks and others having an interest in the Properties. In addition to such equitable remedies, plaintiffs also seek compensatory and punitive damages.

Pursuant to the instant order to show cause seeking a preliminary injunction, this court ordered a temporary restraining order, pending the hearing of the instant motion, enjoining defendant from accessing the Properties; from communicating with any tenants, employees, contractors or other persons with respect to the Properties; from interfering with the management or operations of the Properties and the collection of rents from tenants, and/or the exercise by plaintiffs of the right to quiet enjoyment of the Properties; and from transferring, conveying, mortgaging or encumbering any of the Properties or making alterations or physical changes thereto.

After the temporary restraining order (TRO) was issued by this court, defendant sought review of the scope of the TRO from the Appellate Division, Second Department. The Second Department modified the TRO, by order dated June 3, 2004, as follows:

The TRO in the order to show cause dated May 2, 2004 [is] modified to the extent that [plaintiff] Moses Jacobowitz shall continue to manage the properties, pay the mortgage and all ordinary expenses and a salary to himself of 5% of the collective rent rolls, and deposit the remaining income in escrow, and provide [defendant] Mendal Jacobowitz with reasonable access to the properties upon reasonable notice to Moses Jacobowitz.

In the instant case, both the plaintiffs and defendant sharply dispute and contradict the opposing sides version of the creation of Xoom and Chase, the purchase of the subject Properties and the ownership of the Properties. Plaintiffs aver that prior to September 15, 1999, Moses Jacobowitz and an individual named Shie Lefkowitz were the sole officers, directors and shareholders of Witz Realty Inc. (Witz). At or about this time, Moses allegedly located an apartment building at 155 South Second Street in Brooklyn and negotiated a contract for Witz to purchase the Property. The contract of sale was allegedly assigned from Witz to Xoom, which applied for a mortgage on the Property. In connection with the mortgage commitment and in preparation of the closing, Moses allegedly executed a Certificate as to Corporate Resolutions of the Board of Directors of Xoom which designated himself as President and Secretary and Shie Lefkowitz as Vice President and Treasurer. The 155 South Second Street property was purchased by Xoom on September 22, 1999.

On October 22, 1999, Shie Lefkowitz allegedly resigned as an officer of Xoom and transferred his interest to Moses. Thereafter, Moses allegedly rehabilitated the property, found new tenants, collected rent and made the mortgage payments. [*3]

On May 20, 2004, Moses allegedly discovered that his uncle, Mendal, the defendant in this action, had executed a deed, purportedly on behalf of Xoom, by which Xoom transferred the 155 South Second St. property to Mendal for $10 consideration. Moses claims that Mendal was never a shareholder, director, officer or employee of Xoom.

Moses Jacobowitz alleges that three other such fraudulent deed transfers were made by Mendal Jacobowitz. In 2001, Moses allegedly formed Chase to acquire additional properties. In 2001 and 2002, Chase acquired three additional properties located at 70 St. Nicholas Avenue, 350 Melrose Avenue and 353 Melrose Avenue in Brooklyn. In 2004, Mendal allegedly executed three deeds transferring these properties from Chase to himself, again for a consideration of $10.

Mendal avers, however, that he provided all the capital utilized by Xoom to purchase the 155 South Second Street property. He also avers that although Moses was interested in getting into the real estate business, Moses did not have any assets to acquire the Properties. Accordingly, Moses allegedly asked Mendal to finance the acquisition of the 155 South Second Street property. Pursuant to an alleged agreement between them, Mendal would own the building and Moses would manage the building for a fee of 10% of the net profit of the building.

Allegedly, in March 1999, Mendal caused Xoom to be incorporated with himself as the sole shareholder and officer. In order to effectuate the purchase of the 155 South Second Street property, Mendal allegedly issued a check in the sum of $300,000 to Xoom.

Additionally, Mendal claims that he also formed Chase and was the sole officer and shareholder. Allegedly, the funds used by Chase to obtain the properties located at 70 St. Nicholas Avenue, 350 Melrose Avenue and 352 Melrose Avenue were obtained by mortgaging the 155 South Second St. property.

Mendal allegedly became alarmed in regard to the subject Properties when he learned, sometime in 2002, that Moses had purchased a home at 441 Wythe Avenue in Williamsburg, Brooklyn. Concerned as to where his nephew had obtained the funds to purchase this allegedly expensive property, he requested the books and records of Xoom and Chase. When such documentation was not received, Mendal instituted a Beth Din proceeding before the Beth Din Zedek Rabbinical Court. The Rabbinical Court allegedly issued an "Eikol" (similar to a secular preliminary injunction) enjoining Moses from engaging in any of the monetary matters concerning the subject Properties without Mendal's knowledge and consent. Moses did not attend any proceedings before the Beth Din Zedek, but apparently did indicate a willingness to appear before a different Beth Din Tribunal in Brooklyn.

Mendal claims that it was not until he had "received no cooperation from [his] Nephew [Moses] and when no proceedings took place before any Religious Tribunal and after [he] learned [his] Nephew had caused Xoom to borrow $50,000 . . . without [Mendal's] consent" that he transferred the properties from Xoom and Chase to himself to "avoid any further borrowing or mortgaging of the Properties." Mendal also allegedly sent out a letter to tenants advising them that the rent should be paid to a realty company which Mendal had formed and owned.

It is well established that a party seeking a preliminary injunction must demonstrate the probability of success on the merits, danger of irreparable harm in the absence of an injunction, and a balance of the equities in his or her favor (Aetna Ins. Co. v Capasso, 75 NY2d 860, 862 [1990]; Doe v Axelrod, 73 NY2d 748, 750 [1988]; Sheffield Towers Rehabilitation and Health Care Ctr. v Novasso, 293 AD2d 182, 185 [2002]; Neos v Lacey, 291 AD2d 434, 435 [2002]; State v Premier Color of NY, Inc., 285 AD2d 544 [2001]; State v Sour Mountain Realty, Inc., 276 AD2d 8, 15 [*4][2000]; Klein, Wagner & Morris v Klein, 186 AD2d 631, 632 [1992]; Northeast Hotel Assocs. v Natl. Advertising Co., 155 AD2d 520, 521 1989]). "Moreover, the remedy of granting a preliminary injunction is a drastic one which should be used sparingly, and which will not be granted absent a showing that there is a clear right to such relief on the undisputed facts presented" (Schneider Leasing Plus, Inc. v Stallone, 172 AD2d 739, 740 [1991] [internal quotation marks and citations omitted], appeal dismissed 78 NY2d 1043 [1991]; see also William M. Blake Agency, Inc. v Leon, 283 AD2d 423, 424 [1991] ["preliminary injunctive relief is a drastic remedy which will not be granted unless a clear right thereto is established under the law and the facts upon the moving papers, and the burden of showing an undisputed right rests upon the movant"] [internal quotation marks and citations omitted]; Romance Bridals v 1385 Broadway Co., 43 AD2d 544 [1973]["clear legal right to the relief sought" must be demonstrated to obtain preliminary injunctive relief]). "Bare conclusory allegations are insufficient to support a motion for a preliminary injunction" (Kaufman v Intl. Business Machines Corp., 97 AD2d 925, 926 [1983], aff'd 61 NY2d 930 [1984]). Rather, the proof establishing the foregoing elements "must be by affidavit and other competent proof, with evidentiary detail" and "[i]f key facts are in dispute, the relief will be denied" (Faberge Intl v Di Pino, 109 AD2d 235, 240 [1985]).[FN1]

The court is mindful, however, that "it is not for this court to determine finally the merits of an action upon a motion for preliminary injunction; rather, the purpose of the interlocutory relief is to preserve the status quo until a decision is reached on the merits" (Gambar Enterprises, Inc. v Kelly Servs., Inc., 69 AD2d 297, 306 [1979] [internal quotation marks and citation omitted]). Therefore, a preliminary injunction may also be granted where injunctive relief is deemed necessary to maintain the status quo, even if the movant's success on the merits cannot be determined at the time that the application for a preliminary injunction is brought ( Mr. Natural, Inc. v Unadulterated Food Products, Inc., 152 AD2d 729, 730 [1989] ["the existence of a factual dispute will not bar the granting of a preliminary injunction if one is necessary to preserve the status quo and the party to be enjoined will suffer no great hardship as a result of its issuance"]; accord U.S. Ice Cream Corp. v Carvel Corp., 136 AD2d 626, 628 [1988]; Burmax Co. v B & S Indus., Inc., 135 AD2d 599, 600 [1987]). Moreover, "where . . . the denial of injunctive relief would render the final judgment ineffectual, the degree of proof required to establish the element of likelihood of success on the merits should be reduced" (State v City of New York, 275 AD2d 740, 741 [2000]; Republic of Lebanon v Sotheby's, 167 AD2d 142, 145 [1990][same]; see also Bisca v Bisca, 108 Misc 2d 227, 233 [1981]["(where) the purpose (of a preliminary injunction) is only to preserve the status quo, the strength and clarity of plaintiff's showing in support of the application as to his or her probabilities [*5]of success in the action, are not so important"]).

As a result, a preliminary injunction to maintain the status quo may be granted even where the court "ha[s] grave doubts regarding the likelihood of plaintiff['s] success on the merits" as long as the court finds that "if [the] preliminary injunction is not granted, any subsequent judgment might be rendered ineffectual" (Schlosser v United Presbyterian Home at Syosset, Inc., 56 AD2d 615 [1977]). Generally, such a preliminary injunction is granted where injunctive relief will prevent the potential dissolution of an existing valuable asset or some comparable potential irreparable harm (see e.g. Mr. Natural Inc., 152 AD2d at 730 [preliminary injunction necessary to maintain status quo despite factual disputes as to merits of claim where "there [was] no assurance that the plaintiff [would] be able to stay in business pending trial" and was in "real danger of losing its business or suffering dissolution" if injunctive relief was not imposed]; U.S. Ice Cream Corp., 136 AD2d at 628 [finding preliminary injunction necessary to maintain status quo where there was "no assurance that the plaintiffs [would] be able to stay in business pending trial" and noting that interference with an ongoing business warranted injunctive relief even where factual disputes exist]; Burmax Co., Inc., 135 AD2d at 600 [preliminary injunction enjoining the distribution of assets was appropriate where injunctive relief was necessary to preserve the status quo and "the defendants w[ould] suffer no great hardship as a result of the issuance of the preliminary injunction"]).

In support of their respective positions, both plaintiffs and defendant have submitted a plethora of inconclusive and contradictory documentary evidence, including, inter alia, mortgage records, bank records, corporate documents and correspondence from accountants and bank representatives, as well as similarly contradictory affidavits from Moses' father, David Jacobowitz, Mendal's and David's mother, Jolan Jacobowitz, and Shie Lefkowitz. Accordingly, under the circumstances of this matter and upon the facts presented, the court finds that plaintiffs have failed to satisfy their high burden of establishing, based upon the undisputed facts, a clear right to the relief sought (see Romance Bridals, 43 AD2d at 544). Plaintiffs have submitted an extensive amount of evidence, all of which purports either to demonstrate the fact of their ownership of the subject Properties or the alleged wrongdoing and fraud of defendant in regard to same. The inconclusive nature of the evidence presented, however, coupled with the contradictory evidence adduced by defendant, presently requires the court to resort to inappropriate speculation, guesswork, conjecture and assessments of credibility to reach a conclusion as to the likelihood of plaintiffs successfully establishing their putative ownership of the Properties, on the one hand, and the alleged misconduct and fraud of defendant, on the other. The existence of such factual disputes, however, will not bar this court from granting a preliminary injunction if one is necessary to maintain the status quo and the party to be enjoined will suffer no great hardship as the result of its issuance (see Mr. Natural, Inc., 152 AD2d at 279; U.S. Ice Cream Corp., 136 AD2d at 628; Burmax Co., Inc., 135 AD2d at 600).

In the instant case, the court finds that the "purpose of a preliminary injunction . . . to maintain the status quo and prevent the dissipation of property that could render a judgment ineffectual" (Moy v Umeki, ___AD2d ___, 2004 Slip Op 06490 [2004]) would be well served by the grant of the preliminary injunction sought in this action. It is undisputed that until 2004, the deeds [*6]to the Properties were held in the names of Xoom and Chase and ownership rights to the Properties were not transferred until Mendal effectuated the complained-of deed transfers to himself in 2004. It is also undisputed that Xoom and Chase have collected rents and paid expenses on these Properties during the time the deeds were held in their names. The court finds that the unrebutted evidence proffered by plaintiffs of the potential disruption of the Properties' rental income by defendant's attempt to collect rentals from the Properties and his apparent stationing of guards at the Properties for the purpose of blocking plaintiffs' access thereto, as well as the evidence of the personal indebtedness of defendant, demonstrates the high probability for a considerable disruption of the status quo at the Properties, with a related potential for encumbrances and/or significant rental income disruptions, which would adversely effect and otherwise dissipate the value of the subject real Properties, if defendant is not enjoined as requested by plaintiffs. Specifically, plaintiffs aver that the requested preliminary injunction will maintain the status quo and prevent "confusion in relation to the respective superintendents of the buildings as to who may give orders, what repairs to make, what rents to collect and from whom." The court agrees. Accordingly, plaintiffs' motion for a preliminary injunction is granted.

In regard to defendant's cross motion for a temporary receiver to operate and manage the Properties during the pendency of such action, such motion is denied. CPLR 6401 (a) provides that a receiver may be appointed "upon motion of a person having an apparent interest in the property which is the subject of an action in the Supreme Court . . . where there is danger that the property will be removed from the state, or lost, materially injured or destroyed." It is well established that "courts . . . exercise extreme caution in appointing receivers . . . because such appointment [generally] results in the taking and withholding of possession of property from a party without an adjudication on the merits" (Hahn v Garay, 54 AD2d 629 [1976]). Accordingly, "the provisional remedy of receivership may be invoked only in cases where the moving party has made a clear evidentiary showing of the necessity of conserving the property and protecting the party's interests" (Kristensen v Charleston Square, Inc., 273 AD2d 312 [2000]). "The drastic remedy of the appointment of a receiver is to be invoked only where necessary for the protection of the parties . . . [t]here must be danger of irreparable loss, and courts of equity will exercise extreme caution in the appointment of receivers, which should never be made until a proper case has been clearly established" (In re Armienti, 309 AD2d 659 [2003][internal quotation marks and citations omitted]; see also Scharff v SS & K Partnership, 187 AD2d 645, 646-647 [1992], lv denied 82 NY2d 665 [1994] ["A detailed evidentiary showing is necessary for the appointment of a receiver" . . . and "conclusory allegations that the appointment of a receiver was necessary" will not suffice]; Bilicki v Bilicki, 257 AD 868 [1939][order granting motion for appointment of receiver for the rents and profits of the subject premises reversed where "there was no basis for the appointment of a receiver . . . on the facts disclosed by the record"]; cf Nelson v Nelson, 99 AD2d 917 [1984][motion for appointment of receiver properly granted where it was undisputed that plaintiff was a joint manager and operator of marital business, and it was also undisputed that no accounting had been rendered or profits distributed for year in question, thereby demonstrating that subject assets were in danger of dissipation]; Gimbel v Reibman, 78 AD2d 897 [1980][motion for appointment of receiver [*7]properly granted where it was undisputed that plaintiff owned 25% interest in subject property or joint venture concerning said property and it was also conceded by defendants that they had commingled income from such joint venture with funds from other properties, thereby creating a situation "ripe for dilution of the income assets"]).

In the instant action, defendant has not made the requisite detailed evidentiary showing demonstrating that the property in question "will be removed from the state, or lost, materially injured or destroyed." Defendant merely states, in conclusory terms, and without submitting any supporting documentary evidence, that "[s]ince it ought to be apparent to my nephew, Moses, that when the Court hears the true facts after a fair trial, it will realize that it was I, and not Moses, that purchased the properties, he is likely to take steps, if he is allowed to continue to manage the properties, that would not be in the best interests of the properties." Defendant also claims that he transferred the deeds to the Properties to himself because he was worried about mortgages Moses allegedly had taken out on the Properties. Defendant does not, however, present any evidence to this court that the Properties are currently in disrepair, are subject to unpaid or delinquent tax liens or other liens, have accrued unpaid water or utility bills, are in foreclosure or are in danger of foreclosure, or that any defaults have occurred in mortgage or other necessary payments on the Properties. Moreover, the nature and extent of both parties' alleged ownership interest in the Properties, as well as the obligations of both parties in regard to said Properties, are sharply contested in this matter, thereby hindering the possibility of a prima facie showing in regard to both the "apparent interest" and "damage to property" prongs of the receivership test. In any event, unlike plaintiffs, who have made the requisite showing of potential disruption to the status quo and concomitant resulting damage to the Properties which will likely result if defendant was not enjoined in regard to his current alleged activities at the Properties, defendant has not demonstrated that plaintiffs' management and operation of the Properties has, or will, result in any damage, let alone material loss or destruction of said Properties. Accordingly, given the drastic nature of the receivership remedy, and the lack of a sufficient evidentiary showing on the part of defendant that the Properties are currently in danger of loss or material injury, this court is constrained to deny defendant's motion for the appointment of a receiver (see Scharff, 187 AD2d at 646-647).

Plaintiffs have also requested that their motion be treated as one for summary judgment. However, the court notes that while there is express authority to convert a dismissal motion made pursuant to CPLR 3211 (a) or (b) into one for summary judgment (see CPLR 3211 [c]), there is no such authority to convert a motion for a preliminary injunction into a motion for summary judgment. In any event, numerous factual issues exist which would preclude the grant of summary judgment (see Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]). Thus, the court declines to treat plaintiffs' motion as one for summary judgment.

Finally, the court denies defendant's motion for a protective order in regard to the deposition transcript of defendant in Matter of Allou Distributors, Inc., a case pending in the United States Bankruptcy Court for the Eastern District of New York, Case No. 03-82321-511. Counsels for plaintiffs and defendant, pending the resolution of discovery motions, entered into a stipulation by which discovery was to be stayed until August 18, 2004. On or about August 2, 2004, counsel for [*8]plaintiffs sent a request, ex parte, to the United States Bankruptcy Court, Eastern District of New York, seeking the deposition transcript of defendant in the aforementioned bankruptcy court proceeding. In response to plaintiffs' counsel's request, the Bankruptcy Court issued a discovery order, dated August 2, 2004, which stated, in relevant part, that "[t]he Court is unaware of any reason why the deposition transcript [requested] should not be publicly available. Accordingly, the Court grants the application and directs the Hudson Reporting Company to release a copy of the transcript to the applicant subject to the payment of the regular fees. The Court further directs the applicant to serve a copy of this Order upon Mendal Jacobowitz and his counsel, if any."

Upon receiving a copy of the order and transcript, defendant proceeded to challenge the court's directive releasing said transcript to plaintiffs and requested that the court stay enforcement of its August 2, 2004 order. In response, the Bankruptcy Court denied defendant's request for a stay and issued a further order, which stated, in relevant part:

[A]ll that [defendant's] counsel argues is that he did not receive notice of the request [for the transcript] which was filed by counsel for [plaintiffs] ex parte. He does not claim that the deposition contained "privileged matter," "attorney's work product" or "trial preparation" materials within the meaning of CPLR 3101(b), (c) and (d). Nor does he argue that the deposition transcript contained confidential material that was otherwise subject to a protective order. In sum, no reason was proffered by counsel for [defendant] as to why the deposition transcript should not have been released. Mindful that the public policy of the federal courts favors disclosure, the court is not inclined to surmise a reason for non-disclosure in the absence of one being argued.

Likewise, this court finds no reason for a protective order to be issued in regard to the subject deposition transcript of defendant. There is no claim that the deposition is in any way privileged or subject to a sealing order. Defendant has proffered no reason as to why such deposition should not be publicly available, as designated by the Bankruptcy Court, or especially why, given New York's liberal disclosure policy, such deposition is not discoverable in the instant action. Additionally, defendant has failed to demonstrate that the plaintiffs acted in bad faith in seeking a copy of the transcript during the pendency of the stipulated-to stay of discovery. The stipulation was entered into in the context of pending discovery motions and depositions, and did not necessarily contemplate the apparently informal application by plaintiffs to a federal court for the purposes of obtaining a transcript deemed by said court to be subject to public availability.

Moreover, defendant's reliance on Matter of Beiny (132 AD2d 190 [1987], lv dismissed 71 NY2d 994 [1988]) is misplaced. That case involved a deceptive subpoena, knowingly aimed at privileged materials, which was served without notice to other parties, and allowed the offending law firm to receive papers "to which no law but deceit entitled it." The law firm used such papers to surprise a witness and then refused to divulge how the papers had been obtained or to produce copies of such papers. Such is not the case here. As previously discussed, no subpoena was involved, rather an apparently informal request was made to the Bankruptcy Court, and no privileged information was sought. Additionally, a copy of the transcript was served upon defendant, so no surprise or prejudice is present (see Paris v Waterman Steamship, 133 AD2d 27 [1989] [lone [*9]sanction against defendant's attorney was appropriate where defendant's counsel sought to surreptitiously introduce medical records at trial which had been obtained in a "covert manner" and "secreted from plaintiff's attorney despite the parties' stipulation (to conduct open disclosure)"]; see also Concert Radio, Inc. v GAF Corp., 99 AD2d 713 [1984] [protective order not warranted where plaintiff's counsel had already been sanctioned for disclosing documents to third parties in violation of stipulation limiting the use of certain documents for the purpose of the subject litigation, where such documents in any event "had already become part of the public record and could have been examined and copied by anyone with an interest in doing so" and the defendants' rights were not "impaired or prejudiced in any way" by the violation of the stipulation]; cf. Daley v Two Penn Plaza, 148 AD2d 338 [1989] [deposition conducted in violation of automatic stay of discovery was struck where deposition took place without any notice to defendant]). Moreover, defendant had an opportunity to contest the federal court's issuance of the transcript. Although this court finds the ex parte application somewhat troubling, given New York's policies of open disclosure and lack of surprise, it does not find that the CPLR was specifically violated in regard to relevant third party discovery rules. It admonishes both parties, however, that non-compliance with the CPLR at any stage of discovery in this matter will not be tolerated, and further ex parte discovery actions should be carefully reviewed for compliance with the CPLR before undertaken by either party. Moreover, the parties are further admonished that stipulations between parties' counsel are not to be lightly disregarded as generally "only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation" (Matter of Byrne v Nassau County Board of Elections, 307 AD2d 1053 [2003] [internal quotation marks and citation omitted]; Matter of Ruiz v Rivera, 300 AD2d 402, 403 [2002]). The court finds, however, that, whatever deficiencies may have existed in plaintiffs' counsel's methods of obtaining the subject transcript, such conduct does not evidence the type of willful disregard of discovery procedures which would warrant the imposition of a protective order in regard to the subject deposition transcript, particularly in light of the absence of any prejudice to defendant. Accordingly, defendant's request for a protective order is denied.

In summary, plaintiffs' motion for a preliminary injunction is granted. Given the numerous issues of fact as to the ownership of the properties, however, the court has determined that such preliminary injunction shall comport with the TRO previously issued by the court, as modified by the order of the Second Department dated June 3, 2004. Accordingly:

It is Ordered that defendant, his employees, agents and representatives and those acting in concert therewith (the Enjoined Parties) are hereby preliminarily enjoined from:

(a) contacting any tenants, employees, contractors or other persons related to the Properties, collecting any rents related to such Properties or issuing any orders or directives in regard to the management or operation of the Properties;

(b) from transferring or conveying, mortgaging or encumbering any of the Properties; and;

(c) making alterations or physical changes to the Properties.

It is further Ordered that Moses shall continue to manage the Properties, pay the mortgage and all ordinary expenses and a salary to himself of 5% of the collective rent rolls, and deposit the remaining income in escrow. Moses shall also provide Mendal with reasonable access to the Properties upon reasonable notice to Moses.

The preliminary injunction is granted upon the posting of what the court deems to be a good and sufficient undertaking by plaintiffs in the amount of ten thousand dollars ($10,000.00) (see [*10]CPLR 6312[b]).

The court denies plaintiffs' request to convert plaintiffs' motion into one for summary judgment. Defendant's cross motion to appoint a temporary receiver and for a protective order is also denied.

The foregoing constitutes the decision and order of the court.

E N T E R,

J. S. C.

Footnotes

Footnote 1:CPLR 6312 (c), was amended in 1996, and provides as follows: (c) Issues of fact. Provided that the elements required for the insurance of a preliminary injunction are demonstrated in the plaintiff's papers, the presentation by the defendant of evidence sufficient to raise an issue of fact as to any of such elements shall not in itself be grounds for denial of the motion. In such event the court shall make a determination by hearing or otherwise whether each of the elements required for issuance of a preliminary injunction exists.