Kamar v AKW Holdings, LLC

[*1] Kamar v AKW Holdings, LLC 2008 NY Slip Op 50668(U) [19 Misc 3d 1113(A)] Decided on April 3, 2008 Supreme Court, Kings County Demarest, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 3, 2008
Supreme Court, Kings County

David H. Kamar, Plaintiff,

against

AKW Holdings, LLC, Hatzlucha Houses, LLC, F.C.I.C., LLC, Gavriel Alexander a/k/a Gabe Alexander, Jack Wercberger a/k/a Jacob Wercberger, Abraham Wercberger a/k/a Abe Wercberger, Jacob Knopf a/k/a Jacob Yehuda Hakohen Knopf, Shlomo Knopf a/k/a Shlomo Hakohen Knopf a/k/a Shlomo Hakohen Knopf a/k/a Sol Knopf a/k/a Solomon Knopf, a/k/a Salomon Knoff, Izon Business Products, Inc., Defined Contribution Plan, and John Doe(s), LLC, Defendants.



4914/06



Attorney for Plaintiff

David Feinsilver

The Feinsilver Law Group

215 Millburn Avenue

Millburn, New Jersey 07041

Attorney for Defendants AKW HOLDINGS LLC HATZLUCHA HOUSES LLC; GAVRIEL ALEXANDER, A/K/A GABE ALEXANDER; JACK WERCBERGER, A/K/A JACOB WERCBERGER; ABRAHAM WERCBERGER A/K/A ABE WERCBERGER and IZON BUSINESS PRODUCTS INC.

Richard S. Last, Esq.

Forest, Last, Landau & Katz LLP

225 East 45th Street, 17th Floor New York, NY 10017

Attorney for Knopf Defendants and Defendant FCIC LLC

David Oved, Esq.

Oved & Oved LLP

101 Avenue of the Americas, 15th Flr

New York, NY 10013-1933

Carolyn E. Demarest, J.

In this action by plaintiff David H. Kamar (plaintiff) against AKW Holdings, LLC (AKW), Hatzlucha Houses, LLC (Hatzlucha), F.C.I.C., LLC (FCIC), Gavriel Alexander a/k/a Gabe Alexander (Gavriel), Jack Wercberger a/k/a Jacob Wercberger (Jack), Abraham Wercberger a/k/a Abe Wercberger (Abe), Jacob Knopf a/k/a Jacob Yehuda Hakohen Knopf (Jacob), Shlomo Knopf a/k/a Shlomo Hakohen Knopf a/k/a Shlomo Hakohen Knopf a/k/a Sol Knopf a/k/a Solomon Knopf a/k/a Salomon Knopf (Shlomo), Izon Business Products, Inc. Defined Contribution Plan (Izon), and John Doe(s), LLC (collectively, defendants), to, among other things, recover a 27.5% ownership interest in AKW and profits derived from the sale of certain real property, defendants Jacob, Shlomo, and FCIC move for an order, pursuant to CPLR 3211 (a) (5), dismissing plaintiff's complaint, or, in the alternative, an order staying this action pending arbitration before a Beth Din pursuant to a January 27, 2004 arbitration agreement. Jacob and Shlomo's motion further seeks, to the extent that plaintiff's complaint is not dismissed in its entirety or stayed, an order, pursuant to CPLR 3211 (a) (7), dismissing plaintiff's sixth cause of action for intentional infliction of emotional distress and plaintiff's seventh cause of action for attorney's fees.

Plaintiff moves for an order: (1) granting him summary judgment as against FCIC, (2) entering a judgment against FCIC on the same terms and conditions as a January 29, 2007 judgment entered against Jacob and Shlomo in Application of Kamar v Yehuda (Sup Ct, Kings County, index No. 5305/05) (the confirmation proceeding), (3) striking the arguments which, he claims, were improperly raised for the first time in Jacob, Shlomo, and FCIC's reply memorandum of law in support of their motion to dismiss, and (4) severing the non-commercial tort claims alleged in his complaint as against Jacob and Shlomo, and transferring them to a non-commercial part of the court.

In 2002, Joseph Treff, Esq., an attorney, introduced plaintiff to Jacob and Shlomo, who are brothers and business partners. Jacob and Shlomo then allegedly offered plaintiff an opportunity to invest $1,000,000 with them and other investors, as their partner, in the purchase of two commercial office building properties located [*2]at 16-18 Squadron Boulevard and 20 Squadron Boulevard in New City, in Rockland County, New York (the Squadron Boulevard properties). By a Preliminary Agreement dated June 3, 2002 between plaintiff, Jacob, and Shlomo, plaintiff agreed to deposit the sum of $1,000,000 with Jacob and Shlomo to be used by Jacob and Shlomo to purchase the Squadron Boulevard properties.

The June 3, 2002 Preliminary Agreement provided that Jacob and Shlomo were to form a company which would be the purchaser of the Squadron Boulevard property, and, upon the closing of the purchase, plaintiff was to be a percentage partner with Jacob and Shlomo in the company, sharing all of the percentage gains, losses, and responsibilities of the company. The June 3, 2002 Preliminary Agreement further provided that plaintiff was to have a 27.5% equity interest in the properties, and, in addition, was to receive 12% (or $120,000) on his investment for the first year after the purchase of the property and 15% interest (or $150,000 per year) on his investment thereafter until he received the full return of his $1,000,000 investment. The June 3, 2002 Preliminary Agreement also stated that "[a] full partnership or membership agreement [would] be executed by the principal investors of which [Jacob and Shlomo] and [plaintiff] will be part." On June 3, 2002, plaintiff delivered a check to Warren Sacks, Esq., the attorney for the seller of the Squadron Boulevard properties, in the amount of $125,000 for use as a partial deposit on the purchase of these properties.

Plaintiff claims that on August 6, 2002, the date of the closing of the title on the Squadron Boulevard properties, he was first advised by Shlomo and Jacob that Jack and Abe (who are brothers) and Gavriel were to hold a majority (52.5%) equity interest in the properties; that Gavriel was to be the managing member; and that his 27.5% equity interest could not be reflected in the closing documents that day because the mortgage lender would then require that the closing documents be re-drafted, which would then delay the closing. Plaintiff asserts that he was told that his name would be placed on the deed as soon as possible after the deed and mortgage were recorded.

According to plaintiff, he refused to turn over his $865,000 bank check towards the balance of his $1,000,000 investment unless he received these same representations from Gavriel, who, by telephone, acknowledged his $1,000,000 investment, corroborated Shlomo and Jacob's explanation as to the inability to document his 27.5% equity interest that day, and confirmed to him that he would personally cause his 27.5% equity interest to be reflected on the title documents as soon as possible after the closing on the purchase and mortgage financing. Plaintiff asserts that he then had Gavriel repeat these representations on the telephone to Joseph Treff, Esq. Plaintiff then traveled to the August 6, 2002 closing and delivered his $865,000 bank check, payable to the seller. On August 9, 2002, plaintiff paid, by check, the remaining $10,000 of his $1,000,000 investment to Jacob. [*3]

Plaintiff's $1,000,000 contribution was used as a portion of the total payment of approximately $3,800,000 for the purchase of the Squadron Boulevard properties. Shlomo, Jacob, Gavriel, Jack, and Abe, however, did not arrange to have plaintiff's claimed 27.5% interest reflected anywhere in the closing documents. Rather, these defendants had title to the Squadron Boulevard properties placed in the name of AKW, a limited liability company formed by them. These defendants also formed HH, a limited liability company, to serve as AKW's managing member and to initially hold and control Gavriel, Abe, and Jack's 52.5% membership (ownership) interest in AKW.[FN1] Gavriel was made the managing member of HH. Jacob and Shlomo formed FCIC, a limited liability company wholly owned by them, to hold and control their 47.5% membership (ownership) interest in AKW.

Plaintiff alleges that Gavriel, Jack, and Abe, and Jacob and Shlomo, through FCIC, entered into an operating agreement for their sole benefit and caused all of the distributions of income, surplus proceeds and/or other monies derived from the ownership, operation, and refinancing of the Squadron Boulevard properties to be paid to themselves. Plaintiff claims that defendants refused to add his name as an owner on the deeds to the Squadron Boulevard properties or to issue to him any interests in AKW or FCIC.

On July 22, 2003, AKW sold the 20 Squadron Boulevard property to Windsor Realty Associates, LLC for approximately $10,900,000. There was allegedly $1,500,000 in net surplus proceeds (profit) derived from the sale of this property after payment of all closing costs and the mortgage loan encumbering the property. Plaintiff states that all of these surplus proceeds were distributed among defendants, and that he did not receive any of these monies.

Plaintiff asserts that defendants have "cashed out" and received the return of their initial investment plus profit distributions, loans, and refinancing proceeds, but have refused to make any payments to him on account of interest, profit distributions, return of capital, or otherwise, including payment from the proceeds from the July 22, 2003 sale of the 20 Squadron Boulevard property. Plaintiff further asserts that defendants have failed to provide him with any accountings of the affairs of the Squadron Boulevard properties.

Plaintiff claims that since he had no written agreement with Gavriel, Abe, and Jack, he erroneously believed that he had no recourse against them or AKW, HH, and FCIC, and that he, therefore, sought recourse solely against Jacob and Shlomo. By a written arbitration agreement dated January 27, 2004, plaintiff, Jacob, and Shlomo agreed to submit their dispute to binding arbitration before a rabbinical panel consisting of three rabbis (the Beth Din). Arguments and evidence, including the testimony of Gavriel, were presented before the Beth Din. On March 16, 2004, the [*4]Beth Din issued a Psak Din (an arbitration award), which was arrived at by the consent of the parties.

The March 16, 2004 arbitration award provided that: (1) on or before June 8, 2004, Jacob and Shlomo, individually, jointly, or severally, were required to pay to plaintiff, the sum of $1,120,000, consisting of $1,000,000 in principal and 12% interest thereon (or $120,000) for the time period of August 6, 2002 to August 6, 2003 (the first year of the investment), (2) on or before September 6, 2004, Jacob and Shlomo, individually, jointly, or severally, were required to pay to plaintiff, interest on the principal sum of $1,000,000 at the rate of 15% per annum (or $150,000 per year), with the interest to accrue from August 6, 2003, and to continue until all of the principal and interest was fully paid, (3) plaintiff was to receive 27.5% of the profits derived from the sales of both the 18 and 20 Squadron Boulevard properties at the time when the remaining 18 Squadron Boulevard property is sold, (4) in the event that Jacob and Shlomo were to take additional mortgages on the 18 Squadron Boulevard property, the Beth Din would consider which mortgages and payments could be deducted from profit, and (5) the parties should go to an attorney and jointly prepare a partnership agreement and give it to plaintiff. The March 16, 2004 arbitration award further provided that in the event that there were any doubts in the above agreement, then the Beth Din "may clarify and interpret, or add a few improvements in the agreement." It stated that "[s]imilarly, in the event [that] the[re] w[ould] be any controversies, the parties shall return to the Beth Din."

Thereafter, Jacob and Shlomo moved before the Beth Din for relief from the March 16, 2004 arbitration award, but the Beth Din, by decision dated December 21, 2004, denied this request and reaffirmed its arbitration award. On June 24, 2005, the Beth Din noted that Jacob and Shlomo had failed to pay plaintiff any of the $1,120,000, which they were required to pay him by June 8, 2004 and owed to him pursuant to the March 16, 2004 arbitration award. The Beth Din, therefore, enjoined Gavriel and Abe from paying Jacob and Shlomo any funds which they held on Jacob and Shlomo's behalf.

On February 22, 2005, plaintiff filed the confirmation proceeding in this court as against Jacob and Shlomo, pursuant to CPLR article 75, to confirm the March 16, 2004 arbitration award. By a judgment dated January 5, 2006, Justice Wayne P. Saitta, pursuant to CPLR 7510, confirmed the arbitration award and entered a judgment in favor of plaintiff and against Jacob and Shlomo, jointly and severally, in the total sum of $1,481,644, consisting of $1,000,000 in principal, together with interest, through January 3, 2006, of $481,644, consisting of 12% interest through August 6, 2003 in the amount of $120,000, 15% from August 7, 2003, through August 6, 2005 in the amount of $300,000, and 15% through January 3, 2006 in the amount of $61,644. The January 5, 2006 judgment also provided for payment to plaintiff of per diem interest of $410.96, to continue until all the sums were paid in [*5]full.[FN2] In addition, the January 5, 2006 judgment provided that plaintiff was to receive 27.5% of the profits derived from the sale of both the 18 and 20 Squadron Boulevard properties to be paid to plaintiff, together with any remaining unpaid principal and interest, when the remaining building (the 18 Squadron Boulevard property) is sold.[FN3] An appeal by Jacob and Shlomo of the court's January 5, 2006 judgment was dismissed on November 20, 2006.

On February 14, 2006, plaintiff filed this action against AKW, HH, FCIC, Gavriel, Jack, Abe, Jacob, Shlomo, Izon,[FN4] and John Doe(s), LLC.[FN5] Plaintiff's complaint asserts causes of action for fraud and conspiracy to defraud; breach of contract; imposition of an equitable lien and constructive trust upon the subject properties, injunctive relief, and an accounting; breach of an implied contract; unjust enrichment; intentional infliction of emotional distress as against FCIC, Shlomo and Jacob; and recovery of legal fees, costs, disbursements, and expenses.

On April 10, 2006, Jacob and FCIC served an answer to plaintiff's complaint, but Shlomo failed to interpose an answer. Thereafter, Jacob and FCIC failed to appear at a scheduled August 9, 2006 preliminary conference, and Jacob did not appear for a scheduled October 12, 2006 deposition. Jacob and FCIC also did not appear at a November 8, 2006 compliance conference. The November 8, 2006 compliance conference order references the non-appearance of Jacob and FCIC. It also references Jacob and FCIC's failure to comply with plaintiff's document production demands, and Shlomo's default status at that time.

On April 12, 2007, plaintiff filed a motion to enter a default judgment against Shlomo and to strike Jacob and FCIC's answer for failure to comply with discovery. By a stipulation "so ordered" by the court dated May 2, 2007, Shlomo was permitted to serve an answer and Jacob and FCIC were to comply with the outstanding discovery demands. On June 7, 2007, Shlomo, together with Jacob and FCIC, served an answer, and Jacob, Shlomo, and FCIC submitted a response to plaintiff's [*6]notice for discovery and inspection, which objected to every item requested; they also failed to furnish a date for the depositions as required by the aforesaid stipulation.

By order dated November 29, 2007, this court vacated a lis pendens filed by plaintiff against the 19 Squadron Boulevard property. By order dated December 20, 2007, this court directed AKW to hold in escrow $2.5 million from the proceeds of the refinancing of the mortgage on the 18 Squadron Boulevard property, and preliminarily enjoined AKW from further refinancing the building/property or otherwise encumbering or alienating such property, by sale or otherwise, pending further order of this court. This court has directed that discovery proceed during the pendency of the instant motions.

In support of their motion, Jacob, Shlomo, and FCIC argue that plaintiff's complaint must be dismissed, pursuant to CPLR 3211 (a) (5), on the basis that all of plaintiff's allegations against them in this action were already adjudicated by the Beth Din. Where "there has been an arbitration and award in [a] matter, the plaintiff is precluded from bringing a separate action based on the same claim" (Katz v Kar, 192 AD2d 695, 695 [1993]; see also Matter of Biller v David, 37 AD2d 954, 954 [1971]).

In seeking dismissal of plaintiff's complaint, defendant movants also rely upon the doctrine of res judicata. "[T]he doctrine of res judicata applies to arbitration awards with the same force and effect as it applies to judgments of the courts" (McNally Intl. Corp. v New York Infirmary-Beekman Downtown Hosp., 145 AD2d 417, 417 [1988]; Simpson v County of Westchester, 5 AD3d 780, 781 [2004]; Concra v Horowitz, 105 AD2d 1024,1025 [1984]). Defendants point out that, pursuant to the doctrine of res judicata, a transactional approach is applied to determine whether claims are precluded (see O'Brien v City of Syracuse, 54 NY2d 353, 357 [1981]), and "[o]nce a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred even if based upon different theories or seeking different remedies" (Simpson, 5 AD3d at 782; see also McNally Intl. Corp.,145 AD2d at 417). Movants argue that plaintiff seeks to relitigate issues regarding his investment described in the Preliminary Agreement that were already adjudicated by the Beth Din. Clearly, the award promulgated by the Beth Din, whether entered on consent of the parties or not, disposed of all the issues raised in the complaint with respect to the "business [of plaintiff Kamar and Jacob and Shlomo Knopf] at the buildings 18 & 20 Squadron Blvd., in the city of New City, at [sic] the related matters." That award has been judicially confirmed and reduced to judgment and any further litigation of those issues is precluded as to Shlomo and Jacob under the doctrine of res judicata (see Concra,105 AD2d at 1025). However, res judicata is only applicable to the issues raised at the arbitration or which were within the scope of the issues to be decided (see MAC Org. v Dublin Co., 89 AD2d 581, 582 [1982]). Where issues were neither resolved by nor comprehended within [*7]an earlier arbitration, they are not barred by res judicata (see North Shore - Long Is. Jewish Healthcare Sys., Inc.v Aetna US Healthcare, Inc., 27 AD3d 439, 440 [2006]; MAC Org., 89 AD2d at 582; Corcoran v Corcoran, 114 AD2d 881, 881 [1985]; Concra,105 AD2d at 1025; New York Cooling Towers, Inc., v Goidel, 10 Misc 3d 219, 221 [2005]). Thus, the causes of action alleged against Schlomo and Jacob relating to their breach of the terms of the Preliminary Agreement, including claims of fraud, an accounting, unjust enrichment and claims of an implied or "quasi contract", are subsumed in the duly-confirmed arbitration award and are dismissed. Of the causes of action asserted against Schlomo and Jacob, only that alleging "menacing" constituting the intentional infliction of emotional distress survives the motion to dismiss. All other claims are dismissed based upon the doctrine of res judicata.

However, movant FCIC was not a party to the arbitration before the Beth Din and is not obligated to submit to such forum in the absence of a contract to do so. Indeed, for that reason, the award of relief as against FCIC was specifically stricken by Justice Saitta from the proposed judgment submitted by plaintiff in his proceeding to confirm the award. Justice Saitta, in his January 5, 2006 judgment, struck out that portion of plaintiff's proposed judgment adjudging that plaintiff holds an ownership interest in FCIC, which, in turn, owns a 47.5% interest in AKW, titleholder of the Squadron Boulevard properties, as that was not determined or even addressed in the arbitration award. In addition, Justice Saitta struck out the portion of the proposed judgment which required that Jacob and Shlomo "undertake to see that all necessary agreements are executed reflecting plaintiff's 27½;% ownership (membership), interest in AKW" since AKW was not a party to the arbitration and would clearly be prejudiced by such direction. Thus, the motion to dismiss the complaint against FCIC must be denied.

Jacob, Shlomo, and FCIC alternatively argue that in lieu of dismissal of plaintiff's complaint, this court should stay this action and direct that plaintiff's claims be submitted back to arbitration before the Beth Din for final resolution by it (see CPLR 7503 [a]). In seeking this relief, they contend that the Beth Din has ongoing jurisdiction over the parties' dispute in this matter, relying upon the broad language of the January 27, 2004 Arbitration Agreement and the specific provision therein that:

"In the event that after an award is made a dispute between the parties arises as to the interpretation of the award, compliance of the parties, or if a party motions for reargument due to their claim for judicial error or new evidence etc. the parties agree that the arbitrators shall have jurisdiction on the matters to the extent permitted by law. The arbitrators need not explain to the parties or to anyone else the reason for their decision, and their decision is not open for appeal, neither in any religious court nor in any secular court." [*8]

Jacob, Shlomo, and FCIC's reliance on this provision is misplaced since it refers to a dispute between the parties as to the interpretation of the Beth Din's award prior to confirmation. There is no dispute raised as to the interpretation of the March 16, 2004 arbitration award, as its terms are clear and have already been confirmed by the January 5, 2006 judgment. Indeed, the January 27, 2004 Arbitration Agreement also had provided that "the parties submit themselves to the personal jurisdiction of the courts of the State of New York . . . for any action or proceeding to confirm or enforce a decree of the arbitrators pursuant to [CPLR a]rticle 75." Thus, the Arbitration Agreement expressly contemplated enforcement in the courts by a CPLR article 75 proceeding to confirm the arbitrators' decree. It is further apparent from the context of the reference to "judicial error" that this refers to any claimed error by the arbitrators in their adjudication of the dispute. Moreover, an arbitrator has no jurisdiction to overturn a court ruling, which can only be overturned on an appeal.[FN6]

In arguing that the Beth Din has retained jurisdiction of this matter, movants also rely upon language in the March 16, 2004 arbitration award, which states: "The parties agree that in the event there would be any doubts in the above mentioned agreement, then the Beth Din may clarify and interpret, or add a few improvements in the agreement. Similarly, in the event there will be any controversies, the parties shall return to the Beth Din . . ."

Such reliance is similarly misplaced. Plaintiff does not seek clarification or interpretation of the arbitration award. The Beth Din's March 16, 2004 award has already been confirmed and reduced to a final and binding judgment by the court, as set forth in Justice Saitta's January 5, 2006 judgment, and, therefore, this award is not, nearly four years later, subject to further clarification or alteration by the Beth Din.

Defendant movants further assert that the Beth Din, by letters dated December 5, 2006 and February 1, 2007, summoned plaintiff to appear with respect to Jacob and Shlomo's "claims and arguments in the matter of complying with the Rabbinical Court ruling." However, the Beth Din's attempted assertion of jurisdiction over plaintiff does not mandate that he appear before it with respect to the issues now raised in this court. The court, rather than the arbitrators, must generally determine whether an agreement to arbitrate requires their return to arbitration (see Weinberger v Friedman, 41 AD2d 620, 620 [1973]; Greenblatt v Ottley, 106 Misc 2d 169, 173 [1980]). Moreover, it is Jacob and Shlomo, not plaintiff, who did not comply with the March 16, 2004 arbitration award. [*9]

Finally, it is noted that AKW, Gavriel, HH, FCIC, Jack, Abe, and Izon are not subject to any arbitration agreement with plaintiff. It is AKW which sold one of the Squadron Boulevard properties and holds title to the remaining property. The arbitration award was not rendered as against AKW, Gavriel, HH, FCIC, Jack, or Abe, and they were not parties to the confirmation proceeding. Thus, plaintiff could not be afforded complete relief before the Beth Din.

Jacob, Shlomo, and FCIC's argument that Jack, Gavriel, Abe, AKW, HH, and Izon must submit their claims to arbitration since their claims involve the same transactions as those concerning the signatories to the arbitration agreement, is without merit. Jack, Gavriel, Abe, AKW, HH, and Izon oppose Jacob, Shlomo, and FCIC's motion insofar as it seeks to compel them to submit to arbitration. They point out that they never executed any agreement to arbitrate.[FN7]

A party cannot be compelled to arbitrate absent affirmative evidence of an agreement or consent to arbitrate (see Matter of Waldron [Goddess], 61 NY2d 181, 183 [1984]; God's Battalion of Prayer Pentecostal Church, Inc. v Miele Assoc., LLP,10 AD3d 671, 672 [2004], affd 6 NY3d 371 [2006]; Credit Suisse First Boston Corp. v Cooke, 284 AD2d 365, 366 [2001]; Matter of Metamorphosis Constr. Corp. v Glekel, 247 AD2d 231, 231 [1998]). Thus, inasmuch as these defendants were not parties to the January 27, 2004 arbitration agreement, they cannot be compelled to submit to arbitration (see Credit Suisse First Boston Corp., 284 AD2d at 366; Armstrong v Bucci, 153 AD2d 652, 653 [1989]).

Defendant movants further argue that plaintiff's sixth cause of action for intentional infliction of emotion distress must be dismissed because it fails to plead the required elements necessary to establish such a claim. The tort of intentional infliction of emotional distress requires that a plaintiff prove: "(1) extreme and outrageous conduct; (ii) intent to cause, or disregard of a substantial probability of causing, severe emotional distress; (iii) a causal connection between the conduct and the injury; and (iv) severe emotional distress" (Howell v New York Post, 81 NY2d 115, 121 [1993]; see also Roach v Stern, 252 AD2d 488, 491 [1998]). Defendants contend that plaintiff's basis for his sixth cause of action was merely a one-time threat, through an intermediary, was merely trivial, involving hurt feelings and was therefore insufficient as a matter of law. Contrary to this contention, however, plaintiff has alleged that in August 2005, Shlomo directly threatened him, in addition to threatening him through an intermediary, Yehonatan A. Oppenheim, that physical injury would result if he pursued his claims. Specifically, plaintiff alleges that he was told that a religious authority had given its permission to cause physical injury to him and that it would not be safe to ride in his car. Plaintiff asserts that these menacing threats to physically harm him, which were ratified by Jacob, were made in order to [*10]cause him to fear for his well-being and to intentionally inflict emotional harm on him. Thus, it cannot be said that the making of such threats to cause plaintiff physical harm was tantamount to mere insults or trivialities that could only have caused hurt feelings. Rather, such conduct may be characterized as conduct which goes "beyond all possible bounds of decency" and is "utterly intolerable in a civilized community'" (Roach, 252 AD2d at 491 [internal quotation marks and citation omitted]).

Jacob, Shlomo, and FCIC also argue that the sixth cause of action is deficient in that plaintiff has failed to allege that Shlomo's alleged threats caused him any documented physical injury. However, in order to allege a cause of action for intentional infliction of emotional distress, a plaintiff is not required to show that he or she sustained a physical injury (see Bunker v Testa, 234 AD2d 1004, 1004-1005 [1996]; Ruiz v Bertolli, 37 Misc 2d 1067, 1069 [1992], affd 20 AD2d 628 [1963]). It is sufficient, at this stage of the litigation, that plaintiff has alleged that he was threatened with physical violence which caused him immediate apprehension of sustaining physical harm, and that as a result of these menacing threats, he has become fearful for his well-being, has been rendered an insomniac and distraught, and has otherwise suffered actual injuries (see Eves v Ray, 42 AD3d 481, 483 [2007]; Bunker, 234 AD2d at 1005). Thus, plaintiff has adequately alleged, at this point in the litigation, the requisite elements to sustain a claim for intentional infliction of emotional distress, and dismissal of his sixth cause of action must be denied (see Bunker, 234 AD2d at 1005).

Plaintiff's seventh cause of action seeks recovery of attorney's fees incurred by him for having to commence the arbitration proceeding, the confirmation proceeding, and the instant action. The Beth Din and Justice Saitta's January 5, 2006 judgment, however, did not award such fees, and plaintiff has not alleged any statutory authority or an agreement which entitles him to recover these fees. Therefore, dismissal of plaintiff's seventh cause of action is mandated (see CPLR 3211 [a] [7]; Fernandez v Kovetz, 267 AD2d 1025, 1026 [1999]; Ajar v Ajar, 207 AD2d 469, 471 [1994]; Wu v Kao, 194 AD2d 666, 666 [1993]).

In cross-moving for partial summary judgment against FCIC, plaintiff contends that FCIC should be collaterally estopped from denying its own liability under the arbitration award since it is wholly owned by Jacob and Shlomo and represents their interests in the ownership of the Squadron properties as a member of AKW. Plaintiff argues that, in the confirmation proceeding, he had sought to obtain relief against FCIC, but was denied such relief due to the fact that Jacob and Shlomo had successfully argued therein that FCIC was not a party to the dispute, had never executed any agreement, and was not mentioned in the March 16, 2004 arbitration award. Plaintiff contends that, by virtue of Jacob and Shlomo's admission that FCIC is wholly owned by them, FCIC is in privity with them and that the judgment entered in the confirmation proceeding against Jacob and Shlomo is also binding upon FCIC. [*11]Based upon the doctrine of collateral estoppel, plaintiff seeks summary adjudication that the January 5, 2006 judgment is also binding upon FCIC on the same terms."Collateral estoppel precludes a party from relitigating in a subsequent action or proceeding an issue raised in a prior action or proceeding and decided against that party or those in privity [with that party]" (Bueschel v Bain, 97 NY2d 295, 303 [2001], cert denied 535 US 1096 [2002]; see also Matter of New York Cent. Mut. Fire Ins. Co. v Steiert, 43 AD3d 1065, 1067 [2007]). The party seeking to invoke collateral estoppel must show, first, "that the identical issue was necessarily decided in the prior action and is decisive in the present action" and, second, that the other party had a "full and fair opportunity to contest the prior determination of the issue"(D'Arata v New York Cent. Mut. Fire Ins.Co., 76 NY2d 659, 664 [1990]; see also Bueschel, 97 NY2d at 303-304; Matter of New York Cent. Mut. Fire Ins. Co., 43 AD3d at 1067).

FCIC is a limited liability company which has an existence separate and apart from its members (see Limited Liability Company Law § 609). While the piercing of the veil of a limited liability company is warranted in certain instances (see Retropolis, Inc. v 14th St. Dev. LLC, 17 AD3d 209, 210 [2005]; Williams Oil Co. v Randy Luce E-Z Mart One, 302 AD2d 736, 739-740 [2003]), in the confirmation proceeding, it was not determined whether FCIC was the alter ego of Jacob and Shlomo, and, in fact, Justice Sattia declined to extend the arbitration award to FCIC which was not a party thereto. Although the facts suggest that FCIC may ultimately be held responsible for the judgment against its only two members with respect to what may be its only asset (membership in AKW, the owner of the property), FCIC is deemed to be a duly-constituted separate entity and may not be judged liable for the debt of Jacob and Shlomo without evidence to support the piercing of the corporate veil (see Matter of Sharon Towers v Bank Leumi Trust Co. of NY, 250 AD2d 509, 512 [1998]).

Although FCIC may be estopped from relitigating determinations made against Jacob and Shlomo in the confirmation proceeding, the fact that it is in privity with them does not establish FCIC's liability for the obligations incurred by these defendants (see Imagineering, Inc.v Lukingbeal, 1997 WL 363591, * 4 [SD NY 1997]; Carte Blanche [Singapore] PTE, Ltd. v Diners Club Intl., Inc., 758 F Supp 908, 912 [SD NY 1991]). To establish this, plaintiff must show sufficient evidence to justify a "reverse" piercing of the "corporate" veil (see Eagle Transport Ltd. Inc.v O'Connor, 470 F Supp 731, 733 [SD NY 1979]). Whether there is sufficient evidence to justify a "reverse" piercing of FCIC's veil to hold it liable herein must be explored through further discovery and cannot be resolved at this juncture (see Matter of Glenn [Redford], 233 AD2d 248, 251-252 [1996]). Plaintiff's cross-motion for partial summary judgment against FCIC must be denied.

Plaintiff's contention that certain arguments made by the moving defendants should be stricken because they were raised for the first time in the reply [*12]memorandum of law is rejected. Most of the challenged arguments are responsive to plaintiff's own arguments and are in further support of defendant's motion to dismiss the complaint.

Plaintiff further moves for an order severing his sixth cause of action for intentional infliction of emotional distress from his commercial claims, and transferring that cause of action to a non-commercial part of the court. Plaintiff argues that this claim should be severed because it is wholly unrelated to his commercial claims. Pursuant to CPLR 603, a court may sever a claim "in furtherance of convenience or to avoid prejudice." However, courts should grant severance sparingly, particularly when complex issues are intertwined and there is an intricate involvement and interdependency of the facts and issues raised (see County of Chenago Indus. Dev. Agency v Lockwood Greene Engrs., 111 AD2d 508, 510 [1985]). Severance should not be granted where there is a predominance of common facts and severance would not avoid confusion, delay, or prejudice, or would create a multiplicity of actions (see Phillippson v Hexalon Real Estate, 111 AD2d 126, 127 [1985]). Here, plaintiff's intentional infliction of emotional distress cause of action is factually intertwined with his other claims and severance would not promote convenience or avoid prejudice, confusion, and delay, but, rather, would actually further confusion and delay and create an unnecessary fragmentation and multiplicity of actions (see County of Chenago Indus. Dev. Agency, 111 AD2d at 510; Phillippson, 111 AD2d at 127). Thus, such severance must be denied (see CPLR 603).

Accordingly, defendants' motion is granted to the extent that the first cause of action alleging fraud and conspiracy to defraud with respect to plaintiff's investment pursuant to the Preliminary Agreement, the fourth cause of action for breach of implied contract, and the fifth cause of action for unjust enrichment are dismissed as against Jacob and Shlomo Knopf as barred by the doctrine of res judicata, and is otherwise denied except that the seventh cause of action for attorney's fees is dismissed as to all moving defendants. Plaintiff's cross-motion is denied in its entirety.

Counsel is directed to appear for conference on May 14, 2008 at 11:30 A.M. in Commercial Division I, Room 756 of the Courthouse at 360 Adams St., Brooklyn.

This constitutes the decision and order of the court.

E N T E R

J. S. C. Footnotes

Footnote 1:Plaintiff asserts that he has learned that H & H was not utilized and that Gavriel, Abe, and Jack now individually hold their 52.5% membership interest in AKW.

Footnote 2:By judgment entered on January 29, 2007, Justice Sattia added to the $1,481,644 January 5, 2006 judgment, the per diem interest of $410.96 from January 6, 2006 in the amount of $159,452.48, plus costs and disbursements in the sum of $475, bringing the judgment to $1,641,571.48, with per diem interest of $410.96 to continue after January 29, 2007.

Footnote 3:AKW presently retains title to the 16-18 Squadron Boulevard property.

Footnote 4:Izon is a defined contribution plan, which plaintiff initially believed might have succeeded to Abe and Jack's membership interest in HH.

Footnote 5:John Doe(s), LLC is a fictitiously named entity meant to represent any companies which may be owned or controlled by one or more of defendants and which holds title to the Squadron Boulevard property.

Footnote 6:As noted above, Shlomo and Jacob's appeal from Justice Saitta's January 5, 2006 judgment was dismissed on November 20, 2006.

Footnote 7: By stipulation dated March 18, 2008, the defendants have discontinued their cross-claims against each other with prejudice.