Lemle v Lemle

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Lemle v Lemle 2010 NY Slip Op 34007(U) July 9, 2010 Supreme Court, New York County Docket Number: 601281/07 Judge: Barbara R. Kapnick Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 07/13/2010 1] INDEX NO. 601281/2007 NYSCEF DOC. NO. 90 RECEIVED NYSCEF: 07/13/2010 SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PRESENT: BARBARA R. KAPNICK PART~ Justice INDEX NO. (c;:o I J'i?; I MOTION DATE -vMOTION SEQ. NO. (!)Q I01-~ MOTION CAL. NO. The following papers, numbered 1 to _ _ were read on this motion to/for _ _ _ _ _ __ PAPERS NUMBERED Notice of Motion/ Order to Show Cause - Affidavits - Exhibits ... - Answering Affidavits - Exhibits - - - - - - - - - - - - - - tn <t w Cross-Motion: tn 2 0 a: (.!) Replying A f f i d a v i t s - - - - - - - - - - - - - - - - - - Yes ~No Upon the foregoing papers, it is o r d L : this motion wz u-~ ~o ::::> _, .., _, 0 f2 .... w MOTION '8 Dl!CtDl!D llf AOCORDANCI! wm· P.CCOO'IP~~~ c~ w .... a: a: a: 0 ~ w LL RECEIVED a: > _, JUL 122010 ..J ::::> LL .... MOTION SUPPORT OFFICE u NYS SUPREME COURT_ CIVIL w CL tn w a: tn w tn <t u z 0 .... 11--'-r-l-/_q!---f-/...J-:::(O'---_ Dated: _ _ 0 I lMfttlMtA R. KAPMOK 2 Check one: FINAL DISPOSITION Check if appropriate: >ON-FINAL DO NOT POST J.S.C. DIS~~ITION [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IA PART 39 --------------------------------------x MICHAEL LEMLE, individually and as a shareholder of 132 WEST 31 5 r STREET REALTY CORP., suing in the name of 132 WEST 31sr STREET REALTY CORP., DECISION/ORDER Motions Seq. Nos. 004 and 006 Plaintiff, -againstFLORENCE LEMLE, DOUGLAS LEMLE, DEANNE LEMLE BOSNAK and 132 WEST 31sr STREET REAL TY CORP . , Defendants. --------------------------------------x BARBARA R. KAPNICK, J.: Motions sequence numbers 004 and 006 are consolidated for disposition. In action, this plaintiff ("Micky") Michael Lemle, individually and as a shareholder of 132 West 31st Street Realty Corp. (the "corporation"), suing in the name of the corporation, seeks to compel the individual defendants, Florence Lemle, Douglas Lemle and Deanne Lemle Bosnak (plaintiff's siblings), for, and corporate repay assets corporation's ot~erwise to the which Board of corporation they, as Directors, several million controlling to account dollars members of in the allegedly misappropriated or converted in breach of their fiduciary duties for their own personal benefit. [* 3] The Verified Complaint and First Amended Complaint contained claims for the following causes of action: duty (first cause of action); (i) breach of fiduciary (ii) misappropriation and conversion (second cause of action); (iii) fraud (third cause of action); (iv) an independent forensic accounting (fourth cause of action); (v) an accounting of the individual defendant~' official misconduct and wrongful diversion of corporate funds and property (fifth cause of action); (vi) prohibiting action to a preliminary and permanent injunction barring and each of remove corporation, the individual plaintiff as an or taking any action defendants officer from any director .of or taking the (including the appointment of additional directors to the Board) to dilute or reduce plaintiff's ownership interest legitimate fees, in the corporation, distributions, loans his and salary other and other benefits, or evicting plaintiff from his off ice in the building located at 132 West 31st Street (the "building") (sixth cause of action); (vii) common law dissolution of the corporation, including a collection and distribution of the assets of the corporation (seventh cause of action); and (viii) the immediate appointment of a temporary receiver to administer the corporation's affairs and to collect its assets pending the dissolution of the corporation (eighth cause of action) . 2 [* 4] By Dec is ion/Order dated January 9, 2 00 9, this dismissed the first and second causes of action, Court: ( i) that portion of the third cause of action which relates to events occurring more than six years prior to the commencement of the action, the fourth and fifth causes of action, action; (ii) dismissed and the seventh and eighth causes of the non time-barred derivative claim contained in the third cause of action with leave to replead with greater specificity; and (iii) dis~issed the sixth cause of action with leave to replead with greater specificity. Plaintiff Complaint, formerly, permanent subsequently set ting forth filed claims a for: Verified ( i) fraud the third cause of action); and injunction barring and (ii) Second Amended ("first claim"; a preliminary and prohibiting the individual defendants from taking any action to remove plaintiff as an officer or director of the corporation, or taking any action, including the appointment of additional directors to the Board, reduce plaintiff's ownership interest in the salary and other legitimate fees, ·distributions, benefits, to dilute or corporation, his loans and other or to evict plaintiff from his office in the building ("second claim"; formerly, the six~h cause of action). Plaintiff now moves, under motion sequence number 004, for an order pursuant to CPLR § 222l(d) and (e) 3 granting leave to renew [* 5] and/or reargue this Court's prior Decision/Order on the ground that this Court overlooked or misapprehended matters of fact and law, and based on new facts which plaintiff contends were not previously available. The individual defendants oppose the motion and jointly move, under motion sequence number 006, for an order pursuant to CPLR 3211 (a) (2), (5) and (7) and 3024 (b), §§ (i) striking paragraphs 1, 2, 15, 16, 20-61, 63, 64, 72-74, 91-99; 106, 107, 109, 112 and 114-116 of the Second previously remainder Amended dismissed of the Complaint with relating prejudice; to and causes (ii) Second Amended Complaint, and of action dismissing the all and claims causes of action therein, with prejudice. Based on the papers submitted and the oral argument held on the record on December 3, and April 2009 7, 2010, plaintiff's motion for renewal and/or reargument of this Court's January 9, 2009 Decision/Order is granted only to the extent of granting reargument of that portion of this Court's Decision/Order which dismissed plaintiff's accounting claims (i.e., the fourth and fifth causes of action) for failure to state a cause of action. In order to state a claim for an accounting, plaintiff must allege that he "made a demand 4 on the [defendants] for an [* 6] accounting, that the [defendants were] in possession of the books, records, profits, or other assets of the alleged joint venture [or, in this case, the corporation], and that [they] failed or refused to provide such an accounting Corp. V New York (citations omitted)." NAB Cons tr. City Paper Mill, 265 AD2d 312 Inc., (2nd Dep' t 1999) . Defendants argued on the prior motion that plaintiff had not, and could not, allege that defendants had exclusive access to the corporation's books and records, because plaintiff had been repeatedly offered the opportunity to inspect all the books and records at the corporation's offices, an offer that was renewed on the record at the oral argument he.ld on January 16, 2008. It was further this Court's understanding that plaintiff was given access to the books in or about the first week of March 2008. However, additional plaintiff records and claims that workpapers he in was the denied access possession of to the corporation's accountants which would be required for the outside· accounting firm, Perelson Weiner LLP, which was hired by plaintiff, to conduct a full forensic accounting or audit to determine the accuracy records, and validity including of the the corporation's accounts 5 of loans official books extended by and the [* 7] corporation to the parties. Moreover, defendants concede that the amounts set forth in the loan accounts are not accurate. Accordingly, upon reargument·, that portion of defendants' prior motion seeking to dismiss the fourth and fifth causes of action is denied. Defendants argue that plaintiff's re-pleaded fraud claim, in which plaintiff alleges that the accounts are inaccurately recorded on the corporation's books, must be dismissed because plaintiff has failed to allege that: corporation; (a) any misrepresentations were made to the (ii) any defendant acted with scienter; or (iii) the corporation reasonably relied on the alleged misrepresentations to its detriment. This branch of the motion is denied as premature, since it appears to be dependent on the outcome of the accounting directed above. That portion of the mot-ion seeking to strike specific paragraphs from the Second Amended Complaint is likewise denied as premature. Finally, injunctive defendants argue th?t plaintiff's second claim for relief must be dismissed on the grounds that: (a) plaintiff has not alleged any facts showing that defendants intend 6 [* 8] to vote him off the Board, replace him as an officer, and/or charge . him rent for his office space; and (b) plaintiff has no personal rights regarding the number or identity of the other directors on the board. The Second Amended Complaint alleges that "Douglas Lemle and other of the Defendants indicate that the Individual Defendants have conspired to formulate a fraudulent scheme to remove Michael Lemle from the Corporation as a shareholder, director and officer." (~ 113). Plaintiff further claims in opposition to the defendants' motion to dismiss that the defendants have 'moved' to remove him from his position as an officer of the corporation and to deprive him of his equal benefits, including health insurance, contrary to the expressed directive of his mother, Edna Lemle, the largest remains the same. The new single shareholder of the corporation. However, director, the number of Learka Bosnak direc~ors (the daughter of defendant Deanne Lemle Bosnak), was elected, without objection, at the 2008 annual meeting to replace the parties' elderly mother who plaintiff agreed was no longer competent to serve as a director of the corporation, and was re-elected with plaintiff's affirmative vote at the 2009 annual meeting. 7 [* 9] Moreover, plaintiff has not alleged any specific actions which defendants have actually taken to affect his corporation. Moreover, director of the it is undispu~ed corporation and status within the that plaintiff remains a continues to receive health insurance benefits. Accordingly, the second claim of the Second Amended Complaint is dismissed for failure to state a cause of action. Defendants shall serve an Answer to plaintiff's claims for an accounting and for fraud within A preliminary conference 3~ days of entry of this order. shall be held in IA Part 39, 60 Centre Street, Room 208 on Septemb~r 22, 2010 at 10:00 a.m. This constitutes the decision' and order of this Court. Date: July CJ, 2010 J.S.C. !"'~a. liilllf.l&\AA. fL ~ J.S.C. ~~_...,. 8

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