BNI Constr., Inc. v Abdur-Rahim
Annotate this CaseDecided on November 18, 2005
Supreme Court, Kings County
BNI Construction, Inc., Plaintiff,
against
Mikial Abdur-Rahim, Defendant.
35378/04
Yvonne Lewis, J.
The plaintiff (BNI Construction, Inc, hereinafter BNI), by its president and one-third shareholder, Abukarriem Shabazz, has moved by way of Order to Show Cause, dated October 27, 2004, to cancel two mechanic liens filed by the defendant (hereinafter Mr. Abdul Rahim), who is an additional one-third shareholder of the plaintiff corporation, and to restrain him from filing any additional mechanic liens on behalf of BNI. Contrary to the assertions made in the subject mechanic's liens of 9/21/04 and 10/12/04, Mr. Shabazz maintains that Mr. Abdul-Rahim is not the sole shareholder, incorporator, and director of the plaintiff corporation, and that BNI is not owed three million, two-hundred thousand ($3,200,000.00) dollars by BFC Construction Corp. (Hereinafter BFC) with which it had entered into an agreement "to act as a general contractor at a project known as The Crown Heights NPR Associates LP[,] located in Brooklyn." Mr. Shabazz asserts that BNI has been paid approximately 3 million ($3,000,000.00) dollars on said job and is presently owed less than two-hundred thousand ($200,000.00) dollars, which is being paid on a regular basis. Ms. Gloria Butler, the Secretary/Treasurer and final one-third shareholder of BNI, in her affidavit in support of the foregoing request, notes that Mr. Abdul-Rahim is not an officer or board of directors member of BNI, and is ". . .not involved whatsoever with the daily running of BNI Construction, Inc. although he is a 1/3 shareholder. . . .has not been to the offices of BNI Construction, Inc. to work for several months nor has been on the job site which the mechanic's lien filed relates to." Ms. Lorena Robinson-Saeed, President of Lorshel, Inc. and project manager on the subject job on behalf of BFC, further corroborated the representations made by Mr. Shabazz and Ms. Butler.
An additional Order to Show Cause, dated November 24, 2004, was interposed by the plaintiff seeking to have the within matter re-assigned to the Commercial Division and to expedite the initial Show Cause Order so as to avoid undue delays to the aforementioned project. On the basis of the proceeding, this court sees no valid basis for said request which is accordingly denied.
Attorney Donnahue George, who has since withdrawn from this matter, submitted an affirmation in opposition, dated January 5, 2005, objecting to the plaintiff's request to have the subject mechanic liens lifted. He predicated that opposition on the basis that Ms. Lorena Robinson-Saeed, along with her sister, Gloria Butler, and Mr. Abukarriem Shabazz have defrauded Mr. Abdur-Rahim of all the proceeds (less an initial payment of five-hundred thousand [$500,000.00] dollars) of the above-discussed BFC Construction project. A fortiori, the [*2]defendant asserts that when he granted Ms. Lorena Robinson-Saeed access to his corporate books and records to assist in maintaining the BFC contract, she ". . . used such access to fraudulently and illegally orchestrate the false pretense of her co-conspirator's (sic) ownership of BNI." That is, "[u]nbeknownst to [him], his consultant Lorena Robinson-Saeed illegally and duplicitously orchestrated the false pretense of ownership of BNI Construction. In furtherance of her fraud, Lorena Robinson-Saeed appointed officers and established a board of Directors to launder the money paid by BFC to herself and [her] co-conspirators through her company Lorshel Inc. One such appointed officer, Vincent Lewis the defendant's superintendent on the Crown Heights Jewish Council Project submitted an affidavit, dated November 26, 2004, in support of Mr. Abdul-Rahim's representations herein to the effect that he ". . .disavows: (1) knowledge and consent of his appointment as Vice President of BNI, (2) his presence at the December 23, 2003 meeting [when a special meeting of the fraudulent board of directors convened to unauthorizedly elect officers and divide the corporate shares in three], and (3) the validity of any documentation in which his name appears, in any matter, associated with BNI." Mr. Abdul-Rahim also explained that he filed the second mechanic's lien in response to an inappropriate and false satisfaction of lien filed by Gloria Butler following his initial filing. In short, it is Mr. Abdur-Rahim's contention that "[d]espite numerous requests, BFC, Lorena Robinson-Saeed, Abukarriem Shabazz, and Gloria Butler have failed to produce any valid documentation to prove that BNI has been paid the $3.2 million dollars owed, thereby satisfying the lien." Furthermore, inasmuch as the purported ownership claimed by Mr. Abukarriem Shabazz and Ms. Gloria Butler is fraudulent and illegal, they have no standing to initiate suit on behalf of the plaintiff corporation for any reason, much less for vacatur of a mechanic's lien asserted by him, the sole valid shareholder and director.
By notice of motion, dated April 14, 2005, the plaintiff moved for an Order striking the defendant's answer and counterclaims due to the defendant's failure to respond to plaintiff's First Set Of Interrogatories, plaintiff's Combined Demands, and plaintiff's First Request For The Production of Documents, all dated February 17, 2005, in violation of the discovery schedule set by the court. The plaintiff also maintains that the mentioned answer with counterclaims was untimely.
The defendant by notice of motion, dated September 6, 2005, applied to this court for an order, pursuant to CPLR 3211, for dismissal of the plaintiff's complaint on the grounds that a defense is founded upon documentary evidence; or the party asserting the cause of action has no legal capacity to sue. Alternatively, the defendant requests that the court treat his motion as one for summary judgment on the issues aforementioned and seeks also to have this court
". . .[i]ssue an [i]njunction and restraining Order preventing individual's (sic) Abu Karriem Shabazz, Gloria Butler, Vincent Lewis and Lorena Robinson-Saeed from presenting themselves as officer's (sic) and director's (sic) or representatives of BNI Construction Inc."
The plaintiff submitted an affirmation and memorandum of law in opposition to the defendant's motion to dismiss and/or for summary judgment on the basis that the defendant has defaulted in opposing its motion to strike his answer and counterclaim, has not complied with its discovery requests, and ". . .has failed to proffer any evidence that contravenes plaintiff's assertion that Mr. Abdur-Rahim was removed as an officer of the corporation by an exercise of legal authority and voting rights of the two-thirds quorum present on December 23, 2003." In [*3]addition, the plaintiff highlights the fact that the documentary evidence submitted by the defendant pre-dates said meeting and therefore cannot be construed as conclusive proof of either his assertions herein or in refutation of plaintiff's claims.
Mr. Abdur-Rahim responded to the foregoing by citing several provisions of the Business Corporation Law (hereinafter, BCL) detailing the formation and conduct of corporations, in general. Mr. Abdur-Rahim then described how he opened business accounts and authorized Ms. Gloria Butler to be a signer solely on the BNI Construction, Inc. Crown Heights Project account. He then repeated having uncovered the unauthorized election of officers and transfer of corporate shares by the illegally constituted Board of Directors on December 23, 2003. Mr. Abdur-Rahim thereupon set forth the BCL provisions pertaining to consideration and payment for shares and concluded his arguments by querying, "[h]ow can Abu Karreim Shabazz, Gloria Butler and Vincent Lewis possibly hold any Board of Director's position or claim any possession of any shares or Shareholder's Agreement, [when] [a]t no point did (Mikial Abdur-Rahim) President/CEO of BNI Construction, Inc. [t]ransfer any percentage of [o]wnership or [s]hares to any person, party or entity. . . .[In addition, he argues that] Plaintiff's discovery demands for interrogatories and deposition is (sic) another attempt to exasperate the Courts and causing (sic) untold hardships on the (Defendant) [by] prolonged (sic) and increasing legal cost." Mr. Abdur-Rahim concludes by reiterating his request for dismissal, summary judgment, and for the injunction and restraining order against the so-termed "fraudulent" plaintiff officers of BNI.
Finally, the plaintiff submitted a reply affirmation which again argued for 1. the transfer of the instant matter to the Commercial Part as the defendant has not opposed said requested transfer; 2. denial of the defendant's motions herein inasmuch as he was never the sole shareholder of BNI, has defaulted in timely answering the summons and complaint, and BNI is not owed any money for which a mechanic's lien is applicable; and, 3. discarding of the defendant's attorney's response to the plaintiff's orders to show cause for his failure to have submitted an affidavit in opposition by someone with personal knowledge of the facts. The plaintiff also argues that the allegations against the alleged two-third shareholders (Mr. Abu Karreim Shabazz and Ms. Gloria Butler) and Ms. Lorena Robinson-Saeed should be disregarded by this court as calumny against non-parties.
In light of the foregoing, this court needs to determine, 1. if the plaintiff has standing to defeat defendant's mechanic's lien on behalf of BNI; 2. whether the plaintiff is entitled to injunctive relief barring the defendant from filing any future mechanic's lien on behalf of BNI;
3. if the defendant has standing to file a mechanic's lien on behalf of BNI; and 4. whether either party is entitled to summary judgment on the points just raised. To resolve those issues, this court notes the following general principles of law; to wit, injunctive relief will not lie where there is an adequate remedy at law (See Nassau Roofing & Sheet Metal Co. v. Facilities Dev. Corp., 70 AD2d 1021); hence, a preliminary injunction requires that its seeker demonstrate 1. the likelihood of success on the merits; 2. irreparable injury absent the granting of preliminary injunction; and 3. a balancing of the equities (See W.T. Grant Co. v. Srogi, 52 NY2d 496, 438 N.Y.S.2d 761; Nassau, Supra; Tucker v. Toia, 54 AD2d 322; Albini v. Solork Assoc., 37 AD2d 835). In balancing the equities, the Court must determine whether the "...irreparable injury to be sustained by the Plaintiff is more burdensome to it than the harm caused to the Defendant through imposition of the injunction (See Edgeworth Food Corp. v. Stephenson, 53 AD2d 588). [*4]In addition, "[a] party seeking summary judgment 'must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" (Ayotte v. Grevasioi, 81 NY2d 1062, 601 NYS2d 463; Alvarez v. Prospect Hosp., 68 NY2d 320, 508 NYS2d 923).
A prima facie showing shifts the burden to the opposing party to produce evidentiary proof in admissible form sufficient to establish the existence of material questions of fact (see Alvarez v. Prospect Hosp., supra). With regards to standing, ". . .a shareholder at the time of the alleged wrongs and at the time of the commencement of the action, . . .is not estopped from asserting causes of action pursuant to Business Corporation Law §626 and 720 (See Business Corporation Law §626[b]; Independent Investor Protective League v. Time, Inc., 50 NY2d 259, 263, 428 NYS2d 671, 406 N.E.2d 486; cf. Bronzaft v. Caporali, 162 Misc 2d 281, 616 NYS2d 863)."
In support of their respective positions herein, Mr. Abdur-Rahim furnished the court with copies of a certificate of incorporation, by-laws, corporate tax returns, financial statements, certifications, and correspondence addressed to him on behalf of BNI, while the plaintiff (as represented by its purported officers, Mr. Abu Karreim Shabazz and Ms. Gloria Butler, and project manager, Ms. Lorena Robinson-Saeed) presented copies of the minutes of a BNI Board of Directors special meeting to elect officers and to transfer corporate shares, and designation of corporate bank account signatory, along with corporate resolutions to open said account, and a Satisfaction of lien on behalf of BNI. These documents were neither originals nor certified copies such as to be self-authenticating. Consequently, the record is devoid of any clear and convincing evidence to establish by whom BNI is legitimately owned, leaving this court unable to determine if the purported plaintiff officers are in fact legitimate officers of BNI, have standing to act on behalf of BNI, if they are collectively two-third shareholders of BNI, or if Mr. Abdur-Rahim is indeed the sole shareholder thereof and a victim of fraud. Under these circumstances, summary judgment is untenable for both sides inasmuch as neither party has made a showing of entitlement to judgment as a matter of law by tendering sufficient evidence to demonstrate the absence of any material issues of fact insofar as the respective reliefs sought. The fact is that this court cannot determine ownership and/or placement in BNI on the submissions made; hence, the issue of standing remains an issue of fact to be resolved at trial. The allegations of fraud and criminality advanced by Mr. Abdur-Rahim further serve to raise issues of fact that do not lend themselves to resolution by summary judgment.
Although it is clear that two components of the triad of factors to be considered for the granting of injunctive relief (i.e., the likelihood of success on the merits, and a balancing of the equities) are indeterminable at this juncture, it is indisputable that both sides have failed to establish that irreparable injury will result absent the granting of preliminary injunction, or that money damages, as provided by law, will be inadequate to redress any professed wrongdoing by the other. Hence, there is no basis for the granting of a preliminary injunction in the within matter.
Finally, since both sides agree though by different proportions that Mr. Abdur-Rahim is a
shareholder of BNI, and no affidavit has been submitted by BFC Construction Corp. to refute its
[*5]
indebtedness to BNI, it seems appropriate at this point to allow the mechanic lien that he filed on
behalf of BNI to stand so as to maintain the status quo pending resolution of the within matter. In
the interim, this court sees no other alternative but to appoint a receiver who shall be charged with
the day to day operations of BNI, including but not limited to auditing the books of the
corporation, rendering an accounting of the same, and overseeing any of its construction projects.
This constitutes the decision and order of this court. Settle Order on notice.
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