Max Tec Constr. v Cedarbrook Club

[*1] Max Tec Constr. v Cedarbrook Club 2008 NY Slip Op 50682(U) [19 Misc 3d 1114(A)] Decided on March 24, 2008 Supreme Court, Nassau County Austin, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 March 24, 2008
Supreme Court, Nassau County

Max Tec Construction, Plaintiff,

against

The Cedarbrook Club, THE CEDARBROOK CLUB, INC., OLD CEDAR DEVELOPMENT CORP., individually and as a general partner of The Cedarbrook Club, DANIEL ABITOL, individually and as a general partner of the Cedarbrook Club, M. PIERRE RAFIY, individually and as a general partner of The Cedarbrook Club, SAID AMIRIAN, individually and as a general partner of The Cedarbrook Club, ELYAHOO AMIRIAN, individually and as a general partner of The Cedarbrook Club, KOUROSH JAVAHERI, individually and as a general partner of The Cedarbrook Club, JOHN JAVAHERI, individually and as a general partner of The Cedarbrook Club, JAVAD KHAVARIAN, individually and as a general partner of the Cedarbrook Club, P. KHAVARIAN, individually and as a general partner of the Cedarbrook Club, J. LAVI, individually and as a general partner of the Cedarbrook Club, PARVIZ LAVI, individually and as a general partner of the Cedarbrook Club, HARVEY MANES, individually and as a general partner of the Cedarbrook Club, B. MANES, individually and as a general partner of the Cedarbrook Club, AYOUB MAOINIAN, individually and as a general partner of the Cedarbrook Club, ANGELA MOTTAHEDEH, individually and as a general partner of the Cedarbrook Club, P. MOINIAN, individually and as a general partner of the Cedarbrook Club, NOURI SASSOUNI, individually and as a general partner of the Cedarbrook Club, NEJATOLAH SASSOUNI, individually and as a general partner of the Cedarbrook Club, "JOHN DOE" and "JANE DOE" No.'s 1-15, individually, and personally, representing the fictitious names of individuals whose full names are unknown to Plaintiff, and were at all relevant times herein, general partners of The Cedarbrook Club, Defendants,



1269-06



Counsel for Plaintiff

Perry & Campanelli, LLP

129 Front Street

Mineola, New York 11501

Counsel for Defendants

(for Old Cedar Development Corp., The Cedarbrook Club, Inc.)

Levin & Chetkof, LLP

265 Post Avenue - Suite 290

Westbury, New York 11590

(for Abitbol, Rafiy, Manes)

Gabay-Rafiy & Bowler, LLP

584 Broadway - Suite 507

New York, New York 10012

(for Lavi, Mottahedeh)

Naidich, Wurman, Birnbaum & Maday, LLP)

80 Cuttermill Road - Suite 410

Great Neck, New York 11021

(for Khavarian)

Michael Montesano, Esq.

14 Glen Street - Suite 308

Glen Cove, New York 11542

Leonard B. Austin, J.

Cedarbrook operates a golf and country club in Old Brookville, New York. In 1999, Cedarbrook received a notice from the New York State Department of Environmental Conservation indicating the existence of a hazardous condition on its property and directing that the condition be remediated.

Plaintiff, Max Tec Construction Corp. ("Max Tec"), claims that, by letter dated September 12, 2004, it was retained by Cedarbrook to remediate the hazardous condition. The letter agreement was signed on behalf of Cedarbrook by James Khavarian. James Khavarian signed in the letter agreement indicating he was the president of Cedarbrook.

Upon the signing of the letter agreement, Max Tec began to perform work in connection with the remediation of the hazardous condition.

James Khavarian was not the president of Cedarbrook. Rather, he was Cedarbrook's manager. Cedarbrook claims James Khavarian did not have the authority to enter into the contract on behalf of the corporation. When the officers of Cedarbrook learned about the contract with Max Tec, they disavowed it and directed Max Tec to cease performing work in [*2]connection therewith. Cedarbrook has refused to pay Max Tec for any of the work it performed in accordance with the contract.

Max Tec commenced this action seeking to recover the amount due on the contract.

Cedarbrook is a not-for-profit corporation that was incorporated in 1985. Old Cedar is a domestic corporation incorporated in 1987.

Between its incorporation in 1985 and February 1988, Alan Parente, Ronald Salveiri and Mary Chazotte were the duly elected directors of Cedarbrook. During that period of time, Cedarbrook operated as a not-for-profit golf and country club.

Max Tec alleges that in November 1987, Cedarbrook transferred the property on which the club was located to Old Cedar. Max Tec claims that, in February 1988, Parente, Salvieri and Chazotte resigned as directors of Cedarbrook. Max Tec believes Cedarbrook has never elected new directors.

Max Tec alleges that since 1987, Cedarbrook has been operated as a for profit partnership in which Defendants, M. Pierre Rafiy, Daniel Abitol, M. Abitol, Said Amirian, Elyahoo Amirian, Kourosh Javaheri, John Javeri, Javad Khavarian, Kourosh Khavarian, J. Lavi, Parviz Lavi, Harvey Manes, B. Manes, Ayoub Moinian, Angela Mottahedeh, P. Moinian, Nouri Sassouni and Hejatollah Sassouni, were the partners. Max Tec seeks to have Cedarbrook treated as a partnership and to hold the individual Defendants personally liable for Cedarbrook's obligations on Plaintiff's environmental condition remediation contract.

Defendants deny that Cedarbrook has been operated as a for profit partnership since 1987. Their answers further deny that the individual Defendants are partners in that partnership.

Plaintiff's attorney served a Notice to Admit dated October 3, 2007 which contains 81 separate items. Many of the items ask Cedarbrook to admit whether directors were elected or shareholders meeting held. Others relate to when James Khavarian was hired and his title and authority. Others relate to representations made by one of the Defendants regarding the individual Defendants ownership interests in Cedarbrook.

Defendants, Cedarbrook, Old Cedar, Sayeed Amirian, Ayoub Moinian, Nourollah Sassouni, Nejatollah Sassouni, M. Pierre Rafiy, M. Abitol, Daniel Abitol, J. Lavi, Parviz Lavi and Angel Mottahedeh, move for a protective order vacating the Notice to Admit.

Plaintiff also served subpoenas upon Mary Chazotte and John P. Cassandro, as non-party witnesses. Mary Chazotte is a former employee of Cedarbrook. John P. Cassandro is, or was, Cedarbrook's accountant.

The subpoena issued to Mary Chazotte directed to her to appear for deposition at the office of Plaintiff's attorneys and to produce "...all books and records together with correspondence by you in regards to the Defendants OLD CEDAR DEVELOPMENT CORP. and THE CEDARBROOK CLUB, INC."

The subpoena issued to John P. Cassandro directed him to appear at the offices of Plaintiff's attorneys for deposition and to produce "...all books and records together with correspondence by you in regards to the Defendant OLD CEDAR DEVELOPMENT CORP. and THE CEDARBROOK CLUB INC., in the above action, and specifically the documents, including but not limited to, books, ledgers, tax returns, tax filings, receipts, bills, documents in support of tax returns, and other such information contained in your office for said Defendants for the years 1997-present."

Old Cedar and Cedarbrook move to quash the subpoenas served upon Mary Chazotte and John P. Cassandro. [*3]

DISCUSSION

A.Notice to Admit

"The purpose of a notice to admit is only to eliminate from the issues in litigation matters which will not be in dispute at trial. It is not intended to cover ultimate conclusions, which can only be made after a full and complete trial. A notice to admit which goes to the heart of the matters at issue is improper (citations omitted)." DeSilva v. Rosenberg, 236 AD2d 508 (2nd Dept. 1997). A notice to admit is to be used "...to elicit a stipulation regarding specific matters concerning which there is general agreement. (citation omitted)." Lewis v. Hertz Corp., 193 AD2d 470 (1st Dept. 1993).

A notice to admit is not to be used to obtain information more properly obtained by another discovery device such as a deposition. Tolchin v. Glaser, -A.D.3d-, 849 NYS2d 439 {47 AD3d 922} (2nd Dept. 2008); and DeSilva v. Rosenberg, supra .; and Falkowitz v. Kings Highway Hosp., 43 AD2d 696 (2nd Dept. 1973).

Contrary to Plaintiff's assertion, its notice to admit does not seek obtain information upon which there is general agreement. Item 1 asks Cedarbrook to admit the it was formed as "...not-for-profit entity." Item 2 asks Old Cedar to admit that it was formed as "...a for profit entity."

Plaintiff claims these items simply ask Cedarbrook and Old Cedar to admit their status. However, the notice to admit does not ask them to admit that they are a specific form of business. New York recognizes numerous types of businesses; i.e. corporations, foreign and domestic (See, Business Corporation Law); not-for-profit corporations (See, Not-for-Profit Corporations Law); religious corporations (See, (Religious Corporations Law); and partnerships, limited partnerships (See, Partnership Law), etc. These types of business entities are "terms of art." Each type of organization has specific rules relating to its operation which affect the operation of the entity and the authority, obligations and liability of those involved therein. Id.

In items 25 through 43, Defendants are asked to admit whether meetings of the shareholders (emphasis added) of Cedarbrook were held to elect directors between 1988 and 2005. This is improper.

Cedarbrook was incorporated as a not-for-profit corporation. Not-for-Profit corporations have members, not shareholders. Not-for-Profit Corporation Law §501. Members with voting rights elect the directors of a not-for-profit corporation. Not-for-Profit Corporation Law §§603(b), 612. See, Harris v. Lyke, 217 AD2d 982 (4th Dept. 1996).

Other items in the notice to admit relate to James Khavarian's employment status and authority to enter into contracts on behalf of Cedarbrook, whether Cedarbrook received letters from the Department of Environmental Conservation regarding the existence of ground contamination, what steps Cedarbrook took to obtain estimates relating to the remediation of the contamination and whether Cedarbrook filed certain tax returns.

Item 74 ask the Defendants to admit "That at one or more times between 1989 and the present, one or more of the defendants have held defendant The Cedarbrook Club Inc to be an investor owned corporation'." The status of Cedarbrook, and whether it should be treated as a business corporation or a partnership, is one of the ultimate issues to be decided in this action. This is an improper use of a notice to admit. See, Singh v. G & A Mounting & Die Cutting, [*4]Inc., 292 AD2d 516 (2nd Dept. 2002).

Plaintiff is attempting to use the October 3, 2007 Notice to Admit as a substitute for other discovery devices such as depositions and Notices for Discovery and Inspection and is palpably improper. It should be vacated. Jonas v. Liberty Lines Transit, Inc., 142 AD2d 554 (2nd Dept. 1988).

B.Quash Subpoenas

The subpoenas served upon Mary Chazotte and John P. Cassandro should be quashed because they are facially defective.

CPLR 3101(a)(4) permits a party to an action to obtain disclosure from a non- party "...upon notice stating the circumstances or reasons such disclosure is sought or required."

The party seeking a deposition of a non-party must demonstrate special circumstances. Brooklyn Floor Maintenance Co. v. Providence Washington Ins. Co., 296 AD2d 520 (2nd Dept. 2002); and CPLR 3101(a)(4).

The subpoena or notice seeking discovery from the non-party must state or be accompanied by a notice stating the special circumstances necessitating discovery from the non party. Moran v. McCarthy, Safrath & Carbone, P.C., 31 AD3d 725 (2nd Dept.

2006); and Matter of Ehmer, 272 AD2d 540 (2nd Dept. 2000). The failure to comply renders the subpoena facially defective. Wolf v. Wolf, 300 AD2d 473 (2nd Dept. 2002); and Lazzaro v. County of Nassau, 240 AD2d 546 (2nd Dept. 1997).

The subpoenas served upon Mary Chazotte and John P. Cassandro do not contain a statement indicating the special circumstances necessitating their depositions as non-parties. Thus, they are facially defective and unenforceable.

Accordingly, it is,

ORDERED, that Defendants' motions for a protective order vacating Plaintiff's Notice of Admit dated October 3, 2007 is granted and Plaintiff's Notice fo Admit dated October 3, 2007 is hereby vacated: and it is further,

ORDERED, that the motion of Defendants The Cedarbrook Club, Inc. and Old Cedar Development Corp. to quash subpoenas served upon Mary Chazotte and John P. Cassandro is granted and the subpoenas are hereby quashed.

This constitutes the decision and Order of the Court.

Dated: Mineola, NY_____________________________

March 24, 2008Hon. Leonard B. Austin, J.S.C.