Dilone v Williams

[*1] Dilone v Williams 2011 NY Slip Op 50729(U) Decided on April 12, 2011 Supreme Court, Queens County McDonald, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 12, 2011
Supreme Court, Queens County

Guillermo Dilone, Plaintiff,

against

Alejandro Williams, Defendant.



17171/2010

Robert J. McDonald, J.

This is an action which was originally commenced by motion for summary judgment in lieu of complaint filed on July 7, 2007. [*2]The plaintiff sold his dental practice to the defendant for the sum of $600,000. According to the "Terms of Payment" dated November 19, 2004, the defendant paid $450,000 to the plaintiff at the time of the sale and signed a promissory note for the remaining balance of $150,000. The balance was to be paid to the plaintiff in three installments of $50,000 per month commencing January 1, 2005. Plaintiff contends that the defendant made one payment of $50,000 towards the note but failed to pay the balance and is now in default in the amount of $100,000. The plaintiff notified the defendant by Notice of Default dated January 29, 2010 that he was to cure the default by March 12, 2010.

On July 7, 2010, the plaintiff commenced the within action by motion for summary judgment in lieu of complaint. However, as there was an arbitration clause contained in the "Sale of Dental Practice" agreement, the motion for summary judgment in lieu of complaint was withdrawn by the plaintiff and the action was subsequently moved to arbitration under the American Arbitration Association.

The plaintiff submits the affidavit of Terry Balkaran, CPA, his former accountant, dated February 22, 2011, stating that he visited the dental office on February 13, 2011 and saw that it was closed. He spoke to an employee at the furniture store downstairs from the dental office who informed him that the defendant had been moving large equipment out of the dental practice. Balkaran also learned that the defendant was in arrears on his rent and that the lease was expiring on March 3, 2011. Balkaran states that he is convinced that defendant has been moving large equipment out of the dental practice. The plaintiff contends that as the property, which is collateral for the note is in danger of being liquidated, sold or lost, that pursuant to CPLR 6201 he is entitled to an order of attachment prohibiting the defendant from selling, assigning, encumbering or otherwise disposing the property that is part of the dental practice in question.

In opposition to the motion, the defendant contends that the application for an order of seizure is moot because the defendant lost his dental practice when he lost his lease. As a result of the lease being lost, the defendant is no longer doing business and there are no assets to attach. In addition, the defendant contends that this matter is no longer pending in Supreme Court as the plaintiff withdrew his motion for summary judgment in lieu of complaint and submitted the matter to arbitration. In addition, defendant contends that the plaintiff has failed to show a likelihood of success on the merits because there are several contested issues of fact such as the amount that is owed on the note, and whether the plaintiff is liable to the defendant on the counterclaim for breach of a restrictive covenant. The defendant submits an affidavit dated March 16, 2011, stating that [*3]when his lease expired he was forced to vacate the premises. He stated that the office assets consisting of a fully worn out dental chair, drill, etc. were put in the dumpster and there are no assets left to attach.

Upon review and consideration of the plaintiff's motion and the defendant's affirmation in opposition thereto, this court finds that the plaintiff's motion for an order of attachment must be denied.

The Courts have held that CPLR 7502( c) governs provisional remedies in arbitration cases, and provides the courts with limited power to "entertain an application for an order of attachment or for a preliminary injunction in connection with an arbitrable controversy, but only upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief (see H. I. G. Capital Mgmt. v Ligator, 233 AD2d 270 [1st Dept. 1966]; Dept. County Natwest Sec. Corp. USA v Jesup, Josephthal & Co., 180 AD2d 468 [1st Dept. 1992]). A party seeking relief under this provision must also make a showing of the traditional equitable criteria for the granting of temporary relief under CPLR article 63 (see Winter v. Brown,49 AD3d 526 [2d Dept. 2008]; Matter of K.W.F. Realty Corp. v Kaufman, 16 AD3d 688 [2d Dept. 2005]). A party may obtain temporary injunctive relief only upon a demonstration of (1) irreparable injury absent the grant of such relief; (2) a likelihood of success on the merits; and (3) a balancing of the equities in that party's favor (see W.T. Grant Co. v Srogi, 52 NY2d 496[1981]).

Here, the plaintiff's motion papers fail to establish his entitlement to injunctive relief under CPLR 6301. The plaintiffs failed to point to any imminent and nonspeculative harm that would befall them in the absence of the requested relief, and failed to demonstrate that the arbitration award to which he may be entitled, which is compensable by monetary damages, would be rendered ineffectual without the grant of an order of attachment (see Rowland v Dushin, 82 AD3d 738 [2d Dept. 2011]; EdCia Corp. v McCormack, 44 AD3d 991[2d Dept. 2007]; Neos v Lacey, 291 AD2d 434 [2d Dept. 2002]).

Accordingly, as the plaintiff has failed to provide a sufficient basis for this Court to grant a pre-award order of attachment in aid of arbitration, it is hereby

ORDERED that defendant's motion brought by order to show cause dated March 2, 2011 for an order of attachment is denied.

Dated: April 12, 2011 [*4]

Long Island City, NY

____________________

ROBERT J. MCDONALD

J.S.C.