Kimelstein v Kimelstein

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Kimelstein v Kimelstein 2011 NY Slip Op 32949(U) October 26, 2011 Sup Ct, Suffolk County Docket Number: 5917/2008 Judge: Emily Pines Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] Index Number: 5917-2008 SHORT FORM ORDER SUPREME COl!RT - STATE OF NEW YORK COl\lMERCli\L DIVISION, PART 46, SUFFOLK COlJNTY Present: HON. EMILY PINFS Original Motion Date: Motion Submit Date: Motion Sequence No's.: 1. S, C. 08-30-2011 08-30-1011 008 MOTD [ ] FINAL X] NON - FINAL r _________________ x LARRY KIMELSTEIN, )llaintiff, Attorney for Defendants Thaler & Gertler, LLP Dominick P. Leonardi, Esq. 90 Merrick Awnue, Suite 400 East Mcadow, New York 11554 -againstJEFFREY KIMELSTEIN and L & J REALTY, LTD and THE VAN DEPOT, INC., ________________ Attorney for Plaintiff Larry Kimelstcin, PRO SE 1023 Park Avenue Huntington, New York 11743 Defendants. X Defendants, Jeffrey Kimelstein, L & J Realty, Ltd., and the Van Depot, Inc., ("Jeffrey Kimelstein Defendants") move, by Notice of Mati on (motion sequence # 008) for an Order dismissing the Plaintiffs Second Amended Veritied Complaint pursuant to CPLR §§ 3211 (a) (I) and (7). Plaintiff, Lany Kimelstein, pro-se, opposes the motion. Essentially, Plaintitfhas alleged that he and Jeffrey Kimelstein as brothers and eoowners of the two Defendant corporations have worked side by side, until Plaintiff left the business based on Jeffery Kimelstein's promise to pay $350,000; that Plaintiff justifiahly relied on such promise to his financial detriment. Plaintiffs This Court dismissed causes of action for breach of contract and specific performance, in its Decision and Order of February 24, 2010 based on the statute of frauds, GaL §§5-703 [* 2] (1) and (2). In that same Decision, the Court denied the motion to dismiss Plaintiff's equitable cause of action to impose a constructive trust and permitted an amendment of Plaintiff's complaint to add a cause of action for unjust enrichment, both of which carried essentially the Court permitted the same required showings. PlaintilT to add to an amended In the same Decision, complaint, a cause of action against the individual Defendant only for breach of a fiduciary duty toward his brother as vvell as a cause of action for dissolution accounting". under BCL § Ii 04-3 and "(t)he concomitant cause of action for an The Court dismissed the existing cause of action for fraud. This is the third in a series of motions in which the Defendants Plaintifrs various causes of actions, often accompanied his complaint. Each time the complaint is amended, by the Plaintiff seeking to amend it appears to give rise to anther flurry of motions. However, in whatever form the proceeding between brothers concerning the extent of their business anything the Defendant's claims ownership, following Plainti!rs family business. departure for his investment from what mayor The constant amendment motions pursuant to CPLR final disposition may take, it is a dispute relationship hrother and the two corporate Defendants, owe the Plaintiff 9 seek to dismiss the and what, if in which Plaintiff in time and sweat equity, may not constitute of the Complaint a closely held as well as the successive 3211 (a) are not helpful to either of the litigants nor to a of this matter, one way or another. The Court will address the merits of the current set of motions briefly. The Jeffrey KimeIstein Defendants seeks to dismiss the following causes of action brought by Plaintiff: and an accounting, I) the newly alleged causes of action for breach of fiduciary duty as such must be brought as derivative claims and Plaintiffhas thel11 in his individual capacity; 2) the cause of action for dissolution, standing, Defendant, since all the documentary Jeffrey Kimelstcin, evidence is a shareholder Page2of5 and filings brought as Plaintifflacks demonstrate that only of Van Depot and L&J; and 3) the [* 3] equitable causes ol'action for unjust enrichment and to impose a constructive trust) since the documentary evidence demonstrates that Jeffrey Kimelstein never transferred his sole interest in the Defendant corporations to his brother, Plaintiff Larry Kimelstein. Plaintiff opposes the motion setting forth that documentary evidence exists contradicting the Defendants' documentary offerings. This is in the form of a check signcd by the individual Defendant, setting forth exprcssly that it was to be applied to the balance owed by the Defendants to the Plaintiff, in order to purchase his interest in the Van Depot, Inc. In addition, Plaintiffsets forth listings of check numbers and dates of payments after that initial check which he states constitute actual payments by Defendants to thc Plaintiff for his share of the business. In addition, in opposition to Defendants' current motion, Plaintiff sets forth the affidavits of eight separate individuals, including a wholesale automobile dealer, familiar with the subject business; other family members, such as Larry Kimelstein's ex-wife and a man who dropped ofT Larry Kimelstein's two sons at the Van Depot for visitation with their father; the owner of a similar business who has worked in the same area as the Plainti ff in such business for over thirty years; a seller of internet advertising for the Van Depot, Inc.; a truck manager for Huntington Chevrolet who used the Van Depot, Inc. to help value his used trucks; a colleague in the same industry Crom Syosset, who spent two months rehabilitating the Van Depol., Inc., and property owned by Defendant L&J, Ltd.; and a former employee of the Van Depot, Inc., from 2000 through 2007. Each afthese persons signed sworn affidavits to the effect that Dcfendant Jeffrey Kimelstein held Larry Kimelstein out to them as his equal pariner in the family business. Defendants reply that the affidavits set forth arc conclusory and are not sufficient to overcome the documents filed by Jeffrey Kimclstein with the Secretary of State, nor the 200 I corporate tax returns. Page 3 of 5 [* 4] In considering a motion to dismiss a complaint pursuant to CPLR § 321 I (a)(7), the Court must afford the pleading a liberal construction, accept all the allegations of the complaint as true, and provide the Ptainti ffwith every possible favorable inference. A(; Capital Funding Partners, 808 NYS 2d 573, Plan of Greater 2009). 842 L P v Stare NE 2d 471 Bank (2005), New York, 67 AD 3d 758, & Trust Peekler Co, 5 NY :ld 582, v Ilealtilinsurance 888 NYS 2d 196 ( 2d Dep't In making this determination, the COUl1should "(d)etennine only whether the facts, as aIIeged, lit within any cognizable legal theory". Leon 2d 83. 614 NYS 2cl 9672. 638 NE 2d 51 1 (I (94). v Martinez. 84 NY Dismissal sought upon documentary evidence under CPLR § 321 I (a) (I )wiII only be granted in those instances where the documents oflaw. Leon AD 3d 1003, presented v Martinez, establish a defense to the claims presented supra; LeiL10witz v Impressive 843 NYS 2d 120 ( 2(1 Dep't V/ith regard to Plaintiffs Homes, as a matter Inc. 43 2007) causes of action in equity, i.e., those to impose a constructive trust and for unjust enrichment, Plaintiff has set forth that the Defendants received valuable benefits, including his contributions over the years to the corporate entities and toward the purchase of the real property on which its located; that Plaintiff relied on the same and is justified in doing so to his own detriment. International 20(8). Hccovery See, State Corp, 56 AD 3(1 848, 866 NYS 2(1823 v (3e1 Dep'j Interestingly, the Court already denied a prior motion to dismiss the cause of action to impose a constructive trust, explained why it was akin to that for unjust enrichment and does not appreciate the current motion, to the extent that it reiterates identical arguments. The Plaintiff is warned that the next time this occurs, if at all, it intends to hear why sanctions should not be imposed upon Plaintiff pursuant to 22 NYCRR § 130-1.1. Defendant is also warned that no further requests at this very late Page 4 or 5 [* 5] stage \vill be granted by the Court to amend the PlaintitT's complaint. 'rhe Court, however, agrees with Plaintiff that the causes of action for breach of t-iduciary duty and a formal accounting are both to be brought as derivative claims, that Plaintitfhas failed to do so and they are, accordingly, dismissed. See Wolf v Hand, 258 ;\D 2d 401, 685 NYS 20 708 (1" Dep't 1999). The cause of action f()r a BeL § ] 104-a is not dismissed because, as Plaintiffsets forth, there exists documentary evidence presented on both sides of this issue. While Plaintiff is correct that if such is proved, none of the equitable claims may proceed, Plaintiffis entitled to attempt to prove these claims in the alternativc. Thus, the motion to dismiss the cause of action for dissolution is denied. The Court notes that with respect to the cause of action for an accounting, that although the same may not be brought for a formal accounting except in derivative form, that the Court is empowered, should it find that Plaintiffhas standing and proves oppression, to order a less drastic remedy than dissolution, such as an accounting. See, Kemp v Beatley, 2cJ 1 173 (1984). 64 NY 2cJ 63,484 NYS 2cJ 799, 473 NE Thus, while the cause of action may not be sought herein as a separate cause of action, it may be treated as the Court already suggested in its February 2010 Decision and Order as "the concomitant action for an accounting". This is one of the COUli's oldest cases; it is time it went to trial. This constitutes the DECISION and ORDER "rthe Court. Dated· Octoher 26, 20] 1 Riverhead, New York Pagc5ol'S

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