Bryskin v Mann

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Bryskin v Mann 2018 NY Slip Op 32080(U) August 24, 2018 Supreme Court, New York County Docket Number: 653348/2016 Judge: O. Peter Sherwood Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 . 'rl·lt•: ST~,\TE ()ll NEW YORK (~(llJRT o~ SlJPf{El\lll{ (~()lJNT'' Clf.~ NI~-\\/ \'(lRK: COMME.RC:l1\l"' l)JVISION t•ART 49 --~~~-------~~~---~~~~·---~-~-~----~~-~-~~-x· Ml\ l~"rfl ·~\V Bf{\1 SK1N anti l(ll\\1ARD LlJKASI-I<JK, lll~:CISICJN fntlt~x Pia in tiffs, 1\Nl> ORDER No . : 653348/2016 -.against1\.1otion Scquc11ce No.: 002 Elli<:~ }\:JANN, 'rllE l\1ANN .J()llN l>OES 1-10., (;l~()lJI•, LL(~~ and l)cfcnd&tnts. - - - - - - - - - ..... - - - - - - ................. - - - - - - ....... ..., ... - -- - - - - - - ... Mr. ........ -X (). J>ETER Sl-IE-1{\V()()D, J.: In this action f(lf breach of contract~ plaintiffs sce.k to recover $1.5 n1illion in O\Ved by defendant r·:ric JVfann (al\,rJann~~) based on plaintiff rv1atthe\V ~~·pron1ot.e~~ fees Bryskin~s (i.'B.ryskin"~) introductions to investors \vho provided over $35 in equity and debt to fund real est.ate projects directed by defendant l\!Iann. r)cfendants respond that the relevant agrccn1ents arc voidable, as they \Vere entered into at the urging of defendants~ counsel plaintiff l~d\vard L.ukashok (~onducL 'rhe Rule f c·Lukash()k''l _) . in violation H.ulc 1.8 of the Ne\v \' ork Rules of Professional requires a la\vyer \Vh<) proposes lo enter into a business client in \Vriting t{) r~lationship \Vith a client to advise the obtain independent \;OUnscL and to o.btain \vritten c.onsenL Ne.ithcr \vas done here. !V1ann has been involved in the real estate industry for over t\vo teacher in the 1nast~rs decades~ including as a real estate progran1 at Ne\v .Y.ork LJniversity. I lis projects include purchase and sale of co-ops and l11uJtiple f~1n1i ly ho1nes. l .. ukashok served as legal counsel regarding several transactions nlanagcd by ~1ann. P1ior to 2005~ l.Jukashok represented Mann personally. ~r·hcreaJler~ \\"hen Mann transitioned to 011erating the business through 1in1itcd liability c.on1pany 1 vehicles~ Ltikash<)k like\visc transitioned lo b a 1notion tbr partia I sun·11nary judgrncnl, these fi.1<.:ts are taken froin the pa11ies · 19-a state1ncn1s (StfJ\llF, NYSCEJ' Docs. No. I l 8 l 20~ and I 55), except as noted. 1\s this 1 Page 1of14 2 of 15 [* 2] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 representing those entities. Lukashok did not have a \.Vritten retainer agr~en1cnt \Vith either J\:1ann or the entities. ln ~-1ay 20I1 ~ l.,ukashok introduced tv·1ann to attorney I3ryskin \>vho had clients interested in investing in real estate ( l.;ukashok Aff<J. l~ryskin and l.ukashok., each ir 3, f)oc. No. 109). In an agreen1ent signed by i\1ann . in his persona:[ capacity and dated ~11ay 23~ 2012, l\tann J{1r hin1sclf and as O\vner of the tv1ann (_iroup and affiliated con1panics f<.>rn1cd f()I· the purpose of investing and acquiring intert:sts in real estate, Liryskin and .Lukashok agreed to coordinate equity invest1ncnts in real estate projects directed by Mann. Bryskin agreed to '"seek out investrnent capital through investors~'! ( [)oc. No. 64 ).. in return fi)r \vhich Mann \-vould pay 13ryskin 20°1.) of Lhc '"Pron1otc Fees'!, paid to l\1ann in connection \Vith tvv·o projects identified in the agreen1cnl ·111c agJccn1cnt also contains an ackno\vlcdgn1cnt that Lukashok had nr the parties (i.t!. ('"~the .l\1ay 1\grecn1enf'). ~~n1c.ilitaled~--- the 1ntroduction rvta.nn and 1-Jryskin). 'fhc agrecrnent 1nakes no provision for any payn1cnt by rv1ann to l.;uka.shok but instead states that ~ . [i]n total ivtatthevv Rryskin and [:dv./ard fCl:eivc 20'~1{, of the ... pron1ote fees~' (ill). I..~ukashok \Viii 'fhe agrccn1en1 is silent as to ho\.V the. lee paid to [~ryskin \Vould be apportioned bct\vccn l3ryskin and Lukashok (itl). 1 As to future project5 . if 13ryskin and Lukashok brought in investors~ Mann agreed t.o pay thcrn ~"at Jcast. 2()'~-i, ~, of the pron1<1tc fees paid to fv1ann and in addition . ~a reasonable increase in gross con1pcnsalion that should be pnid to I\1atthe\v l~ryskin and Fdv;ard L.ukashok as integral parts~ of the business op~rations of the f\1ann (Jroup''\ (id.). \\lhat \:v.·ould constitute ··a reasonal->le increase in gross con1pensation that sh<)uld be paid out to ... Bryskin and ... l.Jukashok'' \l\1as le1l for future negotiation. ·rhe l\1ay Agreen1ent. also provided that . 1._Bryskin w·ill hav·e the oppo11unity to invest ... $25~000 in the t\\/O projects'~ (itl). l··lis invcstn1cnt \vould not be subject to pron1otc fees (itl) . .l\'1ann disclain1s that he understood the contract vvhcn he signed the l\1av J\L?reen1cnl or that ~ he used his O\Vn ~ ~ judgn1ent in deciding to sign .it. Lie insists he relied on his counscL. Lukashok (C>pp. Br. . p. 8). l . ukashok and Bryskin stale. that fv1ann vvas \Vel I aware of the tern1s of the 1\grcen1cnt (Lubashok i\tfd. ~ 4 . Doc. No. l 09 and Bryskin r\fid.~ ~1ay J)oc. No. 57 ii 12). _, Lukahok .subn1rth.·d an atTidavit confinning thal payn1cnt is o\.vcd to Bryskin and that he expects to get onfy ··a s1nall pa11 tor having introduced ivtann tollryskin'"' (Lukahok l\ffd.~ 1f 17, Doc. No. 109). I le also confir111ed that he did not split t{:c$ \vid1 Bryskin (id.1 7). ir Page 2of14 3 of 15 [* 3] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 In July ?() 12~ T\1ann purchased the property at 211 Knickerbocker Ave (the KnickerbQcker Pn)perty), through 211 J(nickerbocker Associates~ f .,t~C~, using at least $7{){)~000 fton1 investors introduced by Rryskin. In ()ct<>ber 2012., Mann acquired a property located at 1407 17 ulton St.. flruoklyn (the J~'ulton Property}, through 1407 Fulton Associates~ l1LC"' . using at least $575.,000 of Ct]uitv prov·ided bv Brvskin" s investors. - v • In L)cccn1bcr 2012, fv1ann sought investors tor a n1uch larger prope11·ics (lhc C)Jiv1S Properties). l11 an udd~d the ~·Arnendn1cnt'' pr~jccL the purchase of five dated lJccc111ber 17, 2012 . the parties fi vc properties anti altered the con1pcnsat.i<ln arrangen1cnt to provide that ··rv1atthc\v l3ryskin and Ed\vard I .ukashok vv·ill receive a totaJ of 37.5o/t> percent ()f the pro1note ices or fees paid t1ul to Eric tv1ann or any~ ownership interest. the Mann (1roup or afliliates receive fron1 the operation of the ffi\'C j the .iV1ay Agrccn1ent that ~~l.i]n addition~ real estate f projectsl ... '~(the '~f)ccen1bcr 1\JTlCildn1cnt'' and -~1\grcc111ents~') (l)oc. ·No. together \Vith I 02). The Decc1nbcr i\n1cnd1ncnt also provides the ice sharing applies lo , .. pron1ote fees \Vhieh relate to return of CH})ital or a re1inancc (lr at the sale of the properties" (ill.). i\s in the IV1ay i\gree1ncnt... the l)ccen1bcr r\rncnd1nent docs not address the all<.>cation of lees bel\¥Cen Hrvskin and I ,.uk.ashok. . ~ J-\lso in Oeccrnbcr~ L,ukashok loaned Tv1ann $26(),000 secured by a pron1issory note signed by IV1ann in his personal capacity (the "'Note~') (Doc. ·No. l 12). On l)ccen1bcr 26, '?O 12, defendants acquired the <)Jl\!fS Propetties through QJ1\1S, LL,(:.. I.Jukashok sen1cd as counsel lo the LL,(:· ( L,ukashok AlTd ir 11 and f\1ann. investt~1ent and provided SLJ~v1F'~ ~r I 01 ). Hryskin perf(lrrned analyses of the potential it to the investors (ill., iI 56).. iv1ann used $2.3 n1illion fr<.n11 l~ryskin . s investors to acquire the QJivfS f>ropertics. Iv1ann repaid the N·otc on or about [)ecen1ber 28~ 20 J 2. Bet\veen June 2013 and T\lfay 2015, Mann acquired properties at 199 C:otlk Street, IJrooklyn [(the C-t>ok l>ropcrt.y f}. 215 Knickerbocker A.venue~ Brooklyn (the K.nickerbocker Property) 1045. 1 lJniont Street~ l~rooklyn (lJnirnl Street Property) and 196 llancock St. Brot)klyn (the I Iancock Prope11y) Bryskin l\ffd. i1 iI 37 . 44, 50 and 56. For rnost of these acquisitions Bry·skin pcrf()rn1e<l an analysis of the invcstn1cnt lor his investors (fvlann SL.Jtv1l: ~~ 60-67 see {1/so Ilryskln 1\fta. ~ ~l 32. 38 . 46). 1\t so1ne unspecified tinie in 2014 . i\:1ann started ra1s1ng concerns that the payn1cnt conten1p.latcd by the j\.1fay i\.grce111ent \Vas unfair agreen1enL On i\1lay 20~ '~Ul(l indicated a desire lo con1c to a ne\·V 2014, he t:L".ikc<l Hryskin to send hiin ""all the agrcen1cnts \VC entered Page 3of14 4 of 15 [* 4] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 tug~lher~') ( i£.l., ~ 68 ). t3rysk in produced the l\r1ay Agrcclnent. ()n fVlay 22, 2014, l\lf ann sent Lhc l'v1ay /\green1cnt lo his brother-in-lavl't atton1ey rv1arc Elei~1nt, asking hin1 lo rcvievv it (ill., iI 70). ()n June 1O~ 20 l 4 . ~4ann paid delendants- over $48 . 000 . reptcscnting 20~/cJ of the prolnotc fee he received. in connection vvith sale of the I-fancock Pr<lJ1t,.rty (it!... ~ 71 ). i\t that tin1c~ l\l1ann did not express any reservations about 111aking the payn1cnt (it/~ ~J 73 }. Nevertheless~. he conti.nucd to take invcstn1cnls through 1-lryskin's iH\lCSlOrs., including acquisition of a property in rv1ay 2015 (l3ryskin i\fl(I ~1,, 56 ). ()ver the C<>ursc of 2015-2016~ defendants received various lees in connection \vi th the Knickerbocker Property but did not pay plaintiffs pursuant to the i\1tay 1\grecn1~nl {hi. ii~l X0- 82 . 85-86J. ·' . In their answer., detcndanls generally deny the con1plaint and assert that the 1\grccn1cnts ar~ voidabie because __ as defendants~ la,vyers~ plaintitls \Vere barred fron1 entering into the /\grcen1c.nts \VithtlUl 11rsl advising iv1ann in \Vriting of the advisability of seek.Ing independent legal counsel and obtaining his \Vritten consent. as is required under Rule 1.8 (i\ns\ver \Vith ('ountcrclain1 . . f)oc. No. 22). Plaintiffs did neither. Defendants also counterclain1 seeking a dee laration that the ./\.grec111cnt.s are void and that .dctendants arc entitled to no con1pcnsation under either agrcen1cnt. (C~ountcrclain1 ~l 20~ Doc. No~ 22)~ Ill.. l\rgu1r1cnls 1\. J>Jaintiff.iJ' i\1·gun1ents in Support of l>-artial Sun1n1ary Jutlgmcnt Plaintiffs n1ovc ror partial stu11n1ary judgn1ent.on the tirst cause of action, l<.>r a declaration that plaintiffs have satisfied their ohligations f:JUrsuant lo the f\grecn1cnts and arc entitled lo be paid. and on the fifth cause of action~ f<Jr breach of contracc based on defendants~ failure to pay fees O\vcd. Plaintiffs also sc.ek to disn1.iss the count.erc:lni1n as well as the third (Rule 1.8), sixth (duress) . and seventh (unclean hands) aftirn1ative,lefenscs¥. Plaintiffs argue i\lf ann has adn1itted that neither [iryskin nor Lukasht1k represented the defendants at the tin1c the parties entered int() the i\green1cnts. Thus, the de1cnse that the i\grccn1ents arc voidable should he rejected. '['he. Agrcc1-r1ents should be interpreted according to their plain n1caning and Mann's cJain1 that he did not read the agreen1ents is not a defense (rvlcn10 al 15). ~lann adn1its tl1at r;ukashok has not served as his personal attorney since 2005 (h-l at 1516~ citingSlJf\1F ii 9~ .Yee c1lso i\..rfann l)eposition Transcript alp. 60:4-9, l)oc. No. l "15 f!\1ann rT'r.I). Page 4 of ·14 5 of 15 [* 5] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 Ev~n if 1. ukashok \Vas l\1a1111 ~ s attorney . the ~it ing (Jreene v (;reene~ ,~grcen1ents arc not voidable (l\lfcn10 at 16-17. 56 NY.Id 86. 92 [ 1981 I ['~1\n attorney is not prohibited frt:n11 entering into a contract \vit.h a client l-1c n1ust do so . of course., \vith respect to his retainer for legal services. 1\nd, all hough. it. is not advisable, an attorney n1ay also contract vvith a cl icnt \Vith respect to 1uatt.ers not involving legal services'\ or in addition to legal services. ·1~hus .a contract hctvveen an attorney and his client is not voidable at the \\/ill of the clicnf~l I.internal citations on1itted.l). Such a contract rnay he voidable if the attorney "'-got the better of the bargain, unless he can sho\v that t.he client vvas fully a\-vare or the consequences and that there \Vas no exploitation of the client's confidence in the attorney"' (ill.). Plaintiffs argue that all oft.he tern1s of lhc i\grcc1ncnts \Vere disclosed to the d~fi.'ndants'.' that. the defendants negotiated the tcrn1s \Vhich \Vere in1portant to thcn1~ and that the defendants adn1itt.ed to having received the better oft.he bargain (Mcn10 at 17-18. citing SlJivtF'.' ~l 75 . citing Mann rrr. at 257-58~ [)oc. N"o. 11.6 [ac.knO\Vl~dging rvtann \Vas ahlc lo do n1orc and bigger deals \Vith pJainri11';s participation than JJreviously~ and that plaintifls have not received anything pursuant to tl1e ;\grcen1ents.. except f()r $48~000J). L.ooking al the get the beller of the bargain. They only got })aid if the rvtann shared the risk, sin1ilar to a contingency fee arrangen1cnt. paying 11laintifts entirely~ Agrcc111ents~ plaintiffs did not \Vas paid a pro1notc fee. The parties Further~ sin1p1y by obtaining financing clsc\vhere defendants could have avoided {~1cn10 al 19). 1\llo\ving dcJcndants to void the 1\green1cnts \.vould be inequitable. lt is undispute.d Hryskin introduced investors to dctcndant.s~ fulfilling plaintiffs' obligation. Defi:ndants sh(>uld not be allo\ved to avoid paying ( ic.I. at 19-20). Plaintiffs con1pare this case lo lls.vociates, Inc. (72 NY2d 587~ 589 [ l 988])~ (.~harlebois v .l.1\4. If-relier In (."harlebois, the plaintiff sought. to void a const.ruction contract because the d~fcndant building contractor \Vas not a ficensed engineer. 'fhat. court hcf d that the contract \Vhich re4uircd \Vork to be done by a Iicenscd engineer, could not he voidclL as the engineer ,,vho actually did the \vork \?vas properly licensed. The unlicensed defendant in that case did not auen1pt lo contract to pcrfr.lrn1 vvork requiring a license. ·rhc court notc<.L hypothetically~ (.hat, even \Vork \vas con1plcted if there had hccn a violation of the Sl(1lutory licensing by· the proper~ re(}Uirc111cnL the licensed .. person . and that "'"forfeitures by operation of la\v arc strongly d·isH1vorcd as a n1atter of public policy and the C~harlcboises 1 etl(>rls lo use that concept" as a svvord for personal gain rather than a shield for the pttblic g<)(>d sh()tlld not be ~ountc-nanced~' (id. at 595). ·rhc f(.1cus should be on the substance~ rather than the fi.Jrt1l (it/.). Page S-of 14 6 of 15 [* 6] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 Further., defendants rati1ied the l\green1cnts by acceptin.g the perfi)rrnancc of the plaintiffs (ivlcn10 at ? 1). l)cfendants received over $15 n1illion in equity investn1ents and over $20 rnillion in debt financing 1nade by invest.ors introdu<.:ed by l3ryskin. f)efen(lants paid plaintiffs app.roxirnatcly $48,000 pursuant to the J\1ay 1\grcclnenL i\1ann never clai1ncd the f\1ay J\green1cnt vvas unf~iir until 2014. l:ven then . he cont.inu~d to accept n1orc lnoncy Jro1n IJryskin . s investors. into 2015 (J\1en10 at 22). f)etcndants' entry into the Deccrnber J\rncndrncnt also served to. ratify the tern1s of the iV1av.. /\ .....grcerncnt ( itl at :23 ). I\ violation of J{uJe 1.8 .. i r such a violation existed., does not create a cause . . rnore (~1lcn10 at 24. citing Kalhnan v Krurn1ick~ 67 i\l)Jd of a disciplinary rule docs rule . docs not" alone~ not~ 1093~ or action . \Vithout I 096 f3d l)cpt 2009J ['"·violation \Vithout rnore . generate a cause of action''])~ A vioJation of that inakc the agrce.n1ents voidable. IJ. l)efcn<lants' /\rgun1ents i11 ()pposition J)eJcndants contend t.ukashok \vas IVlann"s personal attorney~ ({)pp. at J ~ f)oc. No. 1J 9). [)eiendants olTer evidence that J.;ukashok served as rv1ann 's personal attorney a11d/or as the lavvycr t<Jr entities O\Vncd by I'vfann at various points in tin1c (l,ukashok ·rr.'I at 22-23, l)oc. No. I 48). The evidence includes a rnen1orandun1 L. ukashnk \vrotc lo 1'11ann4\ giving Lukashok ~ s opinion that the 1\·1ay /\grccn1cnt \Vas fi1.ir (fVfunn St)~tF ir I 37) and bi Us for legal services to ~4ann "s entities \vhich L.ukashok sent to I\1ann (see f)ocs. No. 122-28). l)efcndants also ·argue 13ryskin reprcsc.11tcd 6), ~1ann, in coordination \\·ith l.ukashok (()pp at ·rhc C, losing Sun1n1ary f{Jr the sale of the J lancock f>ropcrty shows Eric rv1a11n as one of the sellers . and Lukashok and Bryskin as attorneys J(>r the sellers (IJoc. No. 132). 3 [)ctcndants rnaintain that even if plaintiffs only represented the cornpanies, f{ule 1.8 still applies (ir:i. at 1-2 . 18-19). f\:lann \Vas the principal of those c11tities and plaintiffs,; representation of the entities created a liduriary relationship vvith Mann (id. al 18, citing no la\v). Plaintiffs do not clai111 to have co111plied \Vith the requ.iren1cnts of l{ufe 1.8 . Defendants argue that .. ~l olnce the plai11tiff has provided evidence to establish an atforncy-clicht relationshjp al the tin1e contract \Vas entered int.o . the ·execution of the contract and evidence fron1 which it n1ight be inferred that the -~ Bryskin notes correctly that''" l 96 l·fanc.;ock Street 1\ssociatcs'~ \Nas the·~~sellcr," and that rvtann ,,vas not the '"c..:licnt~·. He also state:-; that h~ attended the closing on bchnlfofthc investors only (Bryskin AtTd., i; 6-7 . Doc. No. 57). Page6of14 7 of 15 [* 7] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 client acted \Vithout independent advice., the burden is on the defendant to establish that the contract \\?as fair and \veil understood by fthc f client'' (it/ ut 15, quoting Afcl~lt:1ho1"1 i· Eke-lv'1reke. 503 F Supp 2d 598 . 604 I E[)NY /007 f ldiscussing a breach of fiduciary duty cJairn f). The relationship contcrnplated h.Y the 1\grecn1cnts also created conflicts bct\vcen Bryskin and his client/investors. Plainti11s ~ arguJncnt that the /\gre~rnents arc fi1ir because defendants got the better of the deal also fr1ils. ·rhc question should not he \\:'hether defendants have the better pat1 or t.he bargain no\v~ but \vhelhcr they \Votdd if the 1\grccn1en1s \Vere enforced. These .t\grce1nenls are un1~1i r because plaintiffs did not have risk and their co1npensatinn vastly exceeded the industry standard (()pp.· al 2). l3ryskin drafted the l\·1ay 1\grccn1cnl and Lukashok told ~1ann it \vas fair (i(/. at 8). rv1ann had never taken invcst1ncnts fi·o1n non-tan1ilv n1en1bcrs or entered into such an ~ aureen1cnt ~ previously and he relied on plaintiffs~ counsel (it.1). 'fhc fV1ay .l\grccn1cnt.providcd plaintiffs \Vith con1pcnsat.ion on all future deals in \Vhich their investors pa11icipated (hl ). 'f'hc 2<) 12 l)eccn1ber /\n1end1n~nt \>Vas dcr11anded by plaintilJs \\-'hen the prospect or the QJrvts transaction arose even though the investors had already bec-n introduced (hl at 9). rv1ann did not ratil)r the Agrcen1enls (ill. at 23). ln early to n1id-2014. l\t1ann realized the 1\grecrncnls \Vere unfi:tir and inconsistent \Vith industry norn1s'I \\/hich would have provided for a fee of 2-J··x, of the equity placed. rather than 20-37.So/.) of the pron1ote fees, especially given that rvtann shouldered all of the risk (()pp at 10). LJntil thi.s litigation began. Mann thought the parties <:ould renegotiate the i\green1cnts and con1e to a 1nore equitable arrangcrncnt. lJn1ikc (, lu1rlebois~ 1 v.rhich involved onJy a technical violation of the statutory requircn1ent, here, the plaintifls 1loutcd ethical rules and abused lhe attorney/cf icnt relationship, \Varranting invalidation of the /\~rcc1l1ents. ""' (ill at 24 '). ·rhis \Vas no h:chnical violati(n1. 'l'hat Rule 1.8 does nol give an . . .¥ independent ca.use of action is irr~levanL I-I.ere, that rule pro\rides a ground for not enforcing unl~tir agrecrncnts (it/. J. (~. J>laintiffs' l~cpl~· Plaintiffs argue the court should ignore rv1ann~s self-serving a!1idavit as fitr as it contradicts his deposition tcstin1ony (Reply at 4-9., Dot. No. 152). is not dispositive. Further~ the unilateral belief of the client J\llany of the tlu.:ts put f()rth by tvtann arc irrelevant, such as Bryskin 's relationship Yvith his investors clients~ Mann'ts personal history \Vith Lukashok. and the \vork Mann did. on the QJ ~-1S Properties (ill. al l 0). i\s l.~tr as there are questions abput the enf()rceability of Page 7of14 8 of 15 [* 8] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 the ivlay 1\grce111cnt.. lV'lann ratified it by continuing to \\i'Otk under its tcnns ~ind (1cccpt the benefits'\ even after the tirne he clain1cd the tcr1ns to be untair. Furlh(:r'\ he never n1ade a proposal to plaintiffs f(H· ncvv tcnns (. hl at I 4). DIS(~lJSSl<)N l\I. 1\. Stan·dard for Sun1n1ar} .Judgment 1 -rhc standards fhr sun1n1ary ..iudgn1ent are \VCIJ settled. St11nn1ary judgtncnt is a drastic rcrncdy \vhi<.:h \viii be granted only \vhen the party seeking sun1111ary judgn1cnt has established that there are no triahle issues of f~1cl (see l\re11ti~th ("entut"J··-F'ox C'Pl...I{ 3212 fb]: /1/i:arez '' f'ros1Jecl HosJJ .. 68 NY2d 329 r:iln1 {'011Joration. J NY2d 395 l 19571}. To prcvaJI~ [1986)~ Sillnurn v the pa11y seeking sununary judgn1cnt n1ust rnake a pri1na J~1cie sho\ving of entitlc1nent to judgn1cnt as a n1aUer of la\v tendering evidcntiary proof in ad1nissihlc fr)rn1~ \vhich 1nay include deposition transcripts and other proof annexed to an attorney's affinnation (,\·ce ,.tJ h 1are~ v l'ros11ect llo.\JJ .. sUJJra: ()/an t' Farrell Lines. 64 N Y'">d I 09~ 11985 J~ LucA<!r111a11 •' C'izv ollve1v York. 49 NY2d 557 [ l 980]). Absenl a sutlicicnt shcnving~ the court should deny the 1notion \vithou1 regard to the strength of the oppos·ing papers (see IJ1inet?,ratl v JVelv Y(1rk {}nil·. Aleil. (ytr., 64 N't' 2d 85 I f 1985]). ()nee the initial sho\ving has been tnade~ the burdt·n shifls to the party opposing the 11101 ion f(.lr sununary judg1nent to rebut the prirna tacic shov.-·ing by producing evidcntiary proof in adn1issiblc l"(>rtH sufficient to require a trial of tnatcrial issues of fact (see Ka1!finan v S~ilvert 90 N'\'2d 204~ 208 [ 1997J). 1\ It.hough the court. rnust carefully scrutinize the n1otion papers in a Iight 1nosf" favorable to the patty opposing the n1otion and rnust give that party t.hc benefit. of every 11tvorable intcrcnce (see 1\!egri \' J~·1u11 <~ ~\'hoJJ, 65 N Y2d 625 ( 1985 D and su111n1ar),· judgn1cnl should be denied \Vhcre there is any douht as to the existence or a triable issue of filt;l (see /?01uba E~Ylru<lt:rs. ,. c·el'f)OS, 46 N'r'2d 223 . 23 I [I 978 J)~ bald. <.:onclusory assertions or speculation and !,Tai sha<'knvy scrnblancc of an issuer arc insufficient to de-teat a surnn1ary judgrnent rnotion (,\·.. /. (,'q/)(t/in ~4ssoc. r (;lobe Aft¢. (/orp.~ 34 NY2<l 338, 34 J f 1974 t see Zuckernurn ,. ( 'i(v '?/.1VeH· Y()rk. s1q1ra: Ehrlich v A1nerican Aloninger (}rcenhouse A1.fg. (~orp., 26 NY2d 25 5, 259 I I 970 (). Lastly~ ~~la] 111ot.ion tor sun1n1ary judgn1ent should not be granted where the fr1cts are in dispute. \Vhcre conflicting intcrc.nccs 1nay be dra,vn fron1 the evidence~ or \\/he.re there are issues of credibility'., (l<uiz v (ir{(fi11. 71 1\l)Jd r 112 l2d IJcpt 20101, quoting .\'coll v long l'f. l'Oll'er ...-'1uth.1 294 1\1J2d 348 L2d ~epl 2002]). Page8of14 9 of 15 [* 9] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 ·ro sustain a breach of contract cause of action~ plaintiff n1usl sho\v: ( J} an agree1ncnt~ (2) plaintifCs pcrf()rlnance: (3) delcndanfs breach of that agrccn1ent: and (4) darnages (see f . Liria l' f'uria., 1 I6 i\f)2d ()tJ4, 695 f2d !)ept 1986]). ··"rhc fundarncntaJ rule of t:ontract interprct<ttion is that agrccrnents arc construed in accord \vith the parties" intent ... and \\'hat 1hey say in their \\Tlting!. .... ~f.t]hc best ·1~hus'l 1nus1 be cnfr>n.:.ed according to the plain evidence of \Vhat parties to a \\·ritten agrcc1ncnt intend is a \vritten agreetncnt that is clear and unan1biguous 011 its tcrrns~ and extrinsic evidence of the p.artic~' considered only if the agree1ncnt is arnbiguous I internal <.:itations 0111ittcd I"' (l<h·ersiile t~1cc intent rnay· be ~\'oulh I'lanuin.~ ( 'orp v (~J(l>/'J:\telI Ri verYhl.: 1.1>, 60 .1\ 1>3d 61 66 fI st I )ept 2008], all(/ 13 N Y3d 398 I2009J}. \Vhethcr a 7 contract is an1biguous presents a question of ht\v for resolution by the courts (fr/. at 6 7). c:ourts should adopt an interpretation of a contract \vhich gives rncaning to every provision of the contract. \Vith no provision left '.vithoul force and cftect (see Ritf 14 f1<. {:~orp. v /Jank ()ne 1"rust l~o.. .iV~.4., 37 i\!)3d 272 [I st Dept 2007 J). {.~. i~:nforceaf.>ility of the Contract II is undisputed that ~1ann" t,ukashok and Bryskin arc the parties to the May Agreen1cnt and f)ecen1bcr i\n1cndn1ent and that each signed in his individual capacity (Docs. No. 64 and 102). Plaintitfs perf{)n11ed. Specifically . prior t<l rv1ay 23~ 20J 2~ l.ukashok of [3ryskin to rvlnnn and" once the "'°1~1cilitated'" the introduction May 1\green1cnt \·Vas. signed., 13ryskin produced investors t\vo real estate projects directed by ~1ann fi.)f the Ii.sled therein. The investors put 111illions into projects but 1\1ann fi;tiJcd to pay l-3ryskinx Plaintiffs have ·been dan1agcd as a result of Mann "s breach (fV1ann ·rr.~ pp. l 8-22~ Doc. N<J. 115). 'fhus~ plaintiffs have established an of the elen1cnls of a cause t">f acti<H1 t<)r breach of contract. I)efendants seek to avoid liability by c.Jain1ing the Agrccn1ents are uncnf()rceablc because [~ryskin and Lukashok ,\grcen1ents~ plaintiffs J .8"~) . \VCfC rvtann-s personal law,yers and that by violated l{ulc 1.8 of the Ne"\\-'. '{otk (~~ode inducing~ rv1ann to sign the <Jf Professional (~onduct C~Rule thereb:y cxcu.sing rvtann's perfiJrn1ancc under the 1\grccn1ents. Rule I ~8 applies only if the h1\vyer 1s engaged in the provision of legal scrvi<.:es to the client at the tin1e the business agrccrnent is f()nned. J3ccausc J?laintitTs have sho\vn that there arc no triable issues or fi1ct establishing that f-!ryskin ever undert{)Ok to provide legal services to l'v1ann or to any of his entities, l<~ule 1.8 does not apply and the defense. Hiils as to hiin. f<.egarding t.ukashok, there arc n1aterial issues or fi1cl that preclude rc.jcclion of this defense t,lS to hit.ll. Page 9of14 10 of 15 [* 10] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 n1~1kcs i\lthough l\1ann bald self-serving assertions to the contrary, l3ryskin did not represent Mann <lr any of the entities he controlled \Vhcn the parties signed the tvlay ;\grecrnent or at anytin1e lhcreattcr (l3ryskin 1\tlcl, ~ 4). Ile <.lid not split fees \Vith Lukashuk (ill and L,ukashok l\ffi:I. ~j 7). In May 20 I 2'l iv1ann. and 13rvskin had \Jnlv rcc.enllv been introduced bv Lukashok. l'he i:.-: •· ., -· r) . . . . . ... - • .> - rvlay i\gn.:cn1ent \Vas negotiated by rvfann an.d l~ryskin at arn1s length (!Y1ann ·rr. l 34:7-135 :8, f)oc. No. 116 ). l 'hc ~11ay /\grcernent shotvs una1nbiguously that its purpose vvas l<> coordinate invesln1cnt in real estate projccls directed by ·~· .. Maun~" '·~equity (Doc. N<). 64). 13ryskin 's role is stated clearly as •··scckfing] out invcstn1cnt capital through investors on ltvvT> specific.j projects:" l..,ukashok had already ser\<'Cd a n1inor rote specified for hin1 as having ~'"facilitated the inlroductic>n of the parties"' (i.e. tv1ann and I3ryskin) (i(J.). 4 There is no evidence that Mann ever asked Bryskin to represent hin1 or that llryskin ever otl'cred to do so. f\1ann did n<.>t sign an cngagcn1en.t agrecrnent \,vith llryskin (tvtann f{ulc SlJMF . ~l 12). l'v1ann never 1:nade a retainer deposit re<.:eivcd an invoice !(Jr professional services or paid I3ryskin attorney fees (i<l. not split tees {tJukashok J~ff{L ~l l 3) and l.,ukashf>k ,.tnd il 7 and B.ryskin 1\llu. it 4). 5 .AgrccrnenL Mann got access to investors fln Instead~ l~ryskin did after signing the fv1av ._. 4-- -· a scale he did not ha\'C ptcvi(lusly (1\1ann SUJv11:~ l 33 ). At his deposition'\ f\1ann adn1ittcd that he \Vas ab.le to add seven deals to his rcsun1e that ir \Vere of a inagnitude greater than any deals he had d<n1c previously (l\lfann ~l"r.~ pp. 257-258~ 49-50). 6 1:-0110\ving his success relating to the tvlay 1\grcctn~nt (involving l\VO J)ropcrties), rv1ann signed the Dcccn1hcr l\n1cndn1cnt ackno\vlcdging l3ryskin ~·s role in getting his clients to invest i.n five additional prope11ies~ referred to as the ~·QJ~1S }>rt)pcrt.y" (/cl. the largest project l\i1ann had undertaken lo that point. ft \Vas n1orc ~ii 50-58). This \.Vas, by f·~1r, than six tin1es larger than the -~At his deposition fviann adn1itJcd that he- \Vas introduced to Rryskin by Lukashok (Doc. No. I 15, p. 14: 16-18) and that only Brysk in \>vas able to introduce investors (hi.~ lines I0- J .5) . ., . i\cc-ording to Mann~ his attorney client reialit)nship with f.3rysk in ~'began \.Vhen rv1 r. Lukashok said lo l t\ilann J that l\·,·lr. Bryskin \vould be backing hi1n up on legal ivork f L.ukashok] pcrfonned for [ l\llannf" (!'v1ann /\ftd ~f 19~ f)o<:. No. f 2 r) ln an affidavit~ J\1ann states that Bryskin rcpre-scnled hirn in real estate trnnsacrious over a five year period (iVh1nn A ffd. ,J 4, [loc. No. 8 J ....fr. 60:22-61: I). l. le testified that the parties can1c to a 1nccting of the rninds regarding represt~ntation '"through Lukashok"' {J\1ann Tr. 61: l 7~20 s~~e also Iv1ann Anu. 1. 19 [l)oc. No. 12 l ]) and that he and Bryskin ··spoke abour· Bryskin reprc.senting l\rtann in real estate transactions involving the investors(J'v1ann ·rr. 60:22) (Id 63 :3 ). Mann acknowledged that he never signed a retainer agrcen1ent \\>'ith Bryskjn and that all of the 1 " deals '"·here Hryskin is alleged to have represented ~1ann involved lhe investors ((h/., 65:6-12 and 65:2 f-66:5). Notablv, b,,}. . 20 I' !vtann \vas do in~ al I of his deals through LLC's.. Further.. in all of the deals involving the investors .,,. (id, 65: 13-66: l 3). ·rhe coutt notes that in largest dt~aJ reflected in the record, Bryskin represented the investors~ not the l\.1ann entity QJ\1S ()pern1 ing Agrccn1ent, p. 27 ~ l)oc. No. I OJ}. J)eiendants have not sho\vn that either of thenl had established an attorney-clil~nt re.lationship \Vith Bryskin at anytitnc. ~ ~ ""- Page 10of14 11 of 15 [* 11] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 prior deals (id.~,, 50). l\ila.nn's partnership Vlith Ilryskin and f,ukashok and his acceptance of the fi·ttits of Bryskin . s cfl(u1s Cf>ntinued f(Jr years, afler l)cce1nbcr 2012 fBryskin 1\iliL it ~I 37,, 44~ 49 . 56). l{cgarding Lukashok~ there is a1nple evidence. that he \Vas Mann's la\vyerprior to '()05 and transitioned into an attorney-client relationship \Nil.h the !vtann entities thercatlcr . including during the period at issue (Mann l·r.~ p. 90., f)oc. No. 115 . and J,ukashok --rr. 2():21-21 :6~ 22:6-23. l)oc. No. I 48). /\lthough f\11.ann clain1s .Lukashok also represented hin1 pcrS(n1ally, he conceded that in any deal sin<:e 2005 . t:<Jn1pany (1v1ann l.() the extent l.)ukashok represented anybody" he represented a Jin1ilcci liability ·rr... p. 60, [)oc. No. I 15). As discussed above; by 2012 i\1ann C(lnduc.t.ed his real estate business using the l . LC~ vehicle. ·rhe sole cxceptio11 \-Vas rci1rescntation relating to a closing on his hon1c in 2007. 1\1.ann clai n1~i, hut ci tcs n<> la'v in support, that even if Lukashok represented !\1ann ~ s businesses . Ruic l ,8 applies because l\4ann \vas the n1anaging n1en1ber and S{>lc principal t}f those entities (Opp.'I p. 18). i\f·1ann subn1its an affidavit in \Vhich he asserts that L1ukashok represented both the l.J .. c:ts and Ma11n in his personal capacity (l)r>c. No. 121, f-lowc.vcr~ as dcn1onstralcd by plaintiffs~ ,l 4 and ·rvtann Sl.JMF ~I 98). ;..,there is a significant difference bet\veen rcprescntalion of an entity versus its n1en1hcr.s \Vhcre the 111cn1bers have divergent int.crests. (,<.)·ee fit1kel1nan v Clreenba111n. 14 Misc 1d 1217 ["\f. 836 NYS 2d 484 [Sup ('ttlJ'ljJhell v "1,1cKcon., 75 .l\I) 3d 479~ 481 J lsl (.~.t Nassau C:ty 2007] .. ·~ see al.\·o l)cpt 20101 f1\ la\vyer"s representation ofa husiness entity docs not render the la\v firn1 counst.~I to an individual partner~ ollicer. director (Jr shareh.(llder unless tht: lavv firn1 assun1cd an affitn1ative <luty to represent the individual. f)'~. In support of his clain1 that I...ukasl1ok represented hi1n personally .. !V1ann sites several invoic.cs f()r JcgaJ services addressed to hin1 at his office (rY1ann l\ tl-li ~· il 6 and 7). The in voices all reference \·vork pt:rforn1ed in connection \vith various liinited liability co1n.panies (see f)ocs No. 122-?8). l_-ukashok confirn1s that he ~~only reprt~scnted the entities that iv1ann used to acquire real estate,~ ( L.ukashok Atlcl. .. ~d 7 ). 1\s this is a rnotion tor partial sun11nary judgn1cnt~ the court shall scrutinize. t.he record in a light l110Sl l~lVQrablc {O defendants and give defendants the henef1t of every tavorahlc inlcrenc.~ (see l?:o11.1bl.1 F:x:lr1ulers, 46 N1' 2d al 23 J ). ;\pplying th·is standard . the court finds that there is a n1atcrial issue <>f factas to \Vhcther L,ukashok was providing legal setvic.es to J\,1ann in his perscu1al Page 11 of14 12 of 15 [* 12] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 capacity al the tinl.c he passed alor1g, \Vith recon11nendatitln, the drLift May Agreen1ent. SpcciJical ly~ the triable issue C<)ncen1s his role in negotiation of the ~1ay i·\grecn1cnl (see [)oc. No. 141 ') pp 91-92). Purt.hcr, it appears that., at that tin1e~ Nlann \Vas t.he I 0<.><~10 O\vncr of his entities. ·rhis suggests that the interests <)f Nfann and his entities \.verc aligned at-that tjn1e. f.,ukashok adlnits that he represented l'v1ann ~ s entities throughout the tin1e period at issue. l~tct as to the significance of the staten1cnt at section 15.J of the (}.Jiv1S ,i.-\.ls<>~ L,LC.~ there arc issues of ()perating !\g.rccn1ent that ·"Edv~··ard I~ukash<)k ... has represented [Mann]~' 7 . I h_)\.vcvcr., t.hcse fiicts arc of no n10111cnt on this 1notion. tJnder the terrns of the ivtav... 1\grectncnr. neither 1V1ann nor L.ukashok O\VCS the other anything. ()nly llryskin is obligated lo provide services to f\tlann and l\·1ann~s obligation lor payn1ent runs to IJryskin only. 1\ny sun1s Lukashok niay receive are to be paid out of n1oney earned by Bryskin (l)oc. ·Ne>. 64). ·rhc ]\1ay l\grccn1cnt is silent as t.o h<)\V Bryskin and l~ukashok \Viii share the sun1s earned by Bryskin. "ll1c l)ecen1bcr 1\1ncndn1ent does not alter this structure. Thus~ assun1ing that Ruic 1.8 applies to l . . ukashok and that the 1-\green1cnts. arc voidab.lc as to hin1 . l\.1ann 's obligation to [Jryskin ren1ains and the /\grccn1e11ts arc enforceable . ..... f{ule 1.8 of the Rules of Professi<.,nal c:onducl provides: (a) l\ lavvvcr shall not enter into a business transaction \Vith a client if thc·v have _, di tlering i.nlcrcsts therein and if the client expects the lavvyer to exercise professional j udgtnent therci n f{,r the JJJ~otcction or the client unless: ( J ) the transaction is fi1ir and reasonable to the client and the tern1s of the transaction are fully disclosed and transrnitted in \·\iTiting in a 111anner that can he _, rcasonabl y understood hy the client: (2) the <:Iient is advised in \Vriting <»f the desirability of seeking . and is given a reasonable opportunity to seek . the advice of inde1)cndcnt legal counsel on the . transaction~ and (3) the client gives infon11ed consent, in a writing signed by the client. lo the essential tern1s of the transaction and the lavvyer'srolc in tl1e transaction . including \Vhcthcr the lavvycr is rc11r~scnting the client in the tran.sactil>n. It is undisputed that 2 and 3 did not occur. '"l.()nce the plaintilf has provided evidence to establish an attorney-client relationship at the tin1e contract was entered into . the execution of the contract and evidence fron1 'vhich il n1!ght be inJ.erred t.hnt the client acted wilh<lUt indcpe11dent advice . the ~~ The ()pcraling /\gree1ncnt con finns.th<it Btyskin represented the investors, not Mann (Doc. No. l 30, p. 29). Page 12ofl4 13 of 15 [* 13] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 burden is on the defendant to e.stabl"ish that the contf'acl vvas t~1ir and \-vell understood by client"" (A1(:A.ftthon v /~.'ke-j\/iveke .. 503 F Supp 2d 598 . 604 LEfJN Y 20fj7] . citing In re llolPetr 215 N \' 466 I 1915]). ·rhc tcrn1s of the tran:jaction \Vere '"~fuJ ly disclosed and trans111itted in \vriting in a n1anner that [could} be reasonably understood by the client.'" Mann could have., and did., con1prehcnd the tcrn1s of the 1\grccn1cnts and knc\.v \Vhat \Vould be ovvcd to Bryskin under \Vhat circu1nstanccs. ·rhc question rcrnainit1g is \·Vhcther the transaction \V~ls fi1ir and reasonable. ]"hat: is a question of fi.H.:t. I·lo\vcvcr, the question need not he ans\vcred because . as discussed above . Rule I .8 docs. not 1 apply to 13ryskin~ the only person to \vhon1 ~1ann O\~ves obligations under the lern1s of the ,1\grcen1cnts. Nevertheless~ in the int.crest of conlJJletencss . the court \\··i11 consider regarding the frtirncss of the percentage of the pron1otc fees the J\grcen1cnts. ~/Jann O\VCd Nlann~s clain1 to IJryskin under the tcrrns of asserts (but offers no adrnissiblc evidence in support) that a norn1al contract \votdd have been for a 2 or 3 percent share, and the Agreen1cnts called for 20-3 7 percent He cornparcs apples to oranges. The 2 and 3 percent refer to percentages of the invcstrnt:nt. Plaintiffs provided Nfann access to over $35 n1illion in equity invcst1nents and debt financings (2-3<~_,~, \vould be about $711 . 000 to $1 J)58 .. 000}. 'fhc . '\grccn1ents provided for a share of profit. f\1ann rc<:ei vcd over $4 rnillion (S<) the an1otu1t due plaintiffs \vould be son1c\vherc bct\vecn $800~000 and $ J .,500J>OO). Although plaintif]s stand to n1ake n1ore n1oney using lhc f()rn1Llla agreed to by the parties . plaintiffs also took risk along \\:ith Nlann. If iV1ann n1ade less they \Vould n1akc less ( rv1ann ·rr.~ pp. 38-39, Doc. No. 115) and they \Vould n1ake nothing if they t11iled to produce investors. "fhc .Agrecn1cnls arc neither In any event partial unt~1ir nor unreasonable. SUlllfllary undisputed evidence establishes that jud.gn1ent n1ust be granted to both plainli n:~ because the ~·1ann ratified the contracts \Vhcn. being fully a\vare of the tcnns and ti1ilure lo obtain \Vritten consent, he continued to operate under the tcrn1s of the /\green1cnts and to reap the substantial re\\·~ards that tlo\ved fron1 ne\V invesln1cnls procured JJryskin (1V1ann l~r .. p. 82: 17-2 I . f)oc. No. 115). ~~Ratification occurs \Vhcn a party accepts the benefits of a contract and t~1ils to act prornptly to repudiate iC' (.tJ/len v Riese 514. 517 [I st L>cpt 20 I 3 J citing f)cp~ by J)inlu~fer v A-1e(/if'ltl lit1h. A...fut. Ins. (.'o~ . (Jr~., /n(.' ... l 06 1\lJJd 92 AfJ3d 480 . 481 [1st 2012], Iv tler1ietf 19 ~ry3c1 812 (2012]: I> hilips .(). Bei.1ch~ /.,/;(' v Z(.' ~)1Jecit1ltJ} Jn.\'. (.'o ... 55 ;\[)3d 493, 493-494 [lst [)ept 2008), Iv tlenie<i 12 N'Y3d 713 12009]). Page 13of14 14 of 15 [* 14] INDEX NO. 653348/2016 NYSCEF DOC. NO. 156 RECEIVED NYSCEF: 08/24/2018 While Mann states he \vantcd to renegotiate the cv~n 1\grce111ents~ he did not repudiate thcn1~ after he Ct)ntl udcd they \Vere unfair. Nt1thing other than u desire t<> continue lo access capital \\1ith the assistance of plaiuti ff's .investors and thereby gro\:v the' business, J1reventcd Iv1ann fron1 lerrninating the /\green1cnts. I laving enjoyed the benefits . dctcndants \vill not he heard to <.:ornplain that they \Vere deprived of the 9ppcn1u11ity to get indepcn<.ient counsel <Jr give consent. J{ule J .8 being the sole reason for l\1ann "s refusal to h(_>nor his encl of the baTgain~ the n1otion for partial su111n1z1ry judgn1cnt shall be granted. 'll1c court has considered defendants"' re1naining argun1cnts and finds then1 unavailing.. /\ccordingly . it is hcrchy OJ~l>El{l~I) that, the n1otion o.f plaintiffs f.(Jr partial sun1111ary judgn1cnL, is ()-f{:\N'fEfJ; and it is further ()l~l)EJ.tl~I) that as lo the lirst cause of action for a dcclaratc)ry judgn1ent it is hereby declared that pla·i·nti ffs have satis1ied all of their contractual obligations pursuant t<l the Agrccrnents and arc entitled to payn1ent due and O\.Ving thereunder~ and it is further ()l{l)ERJi:J> that the motion is Cil{ANTEI) as l<> the fifth cause of actit)n f()r breach of l~ontract against deJendanl t::ric Mann and in tavor of plrrintifi~ lVlatthe\v IJryskin and [~d\vard J.,ukashok: and it further ()l~IJEl{f1~l) that the countcrc.lain1 and the third, ~ixth and seventh affirn1ativc dclcnses of de1cnd,1nts are hereby l)JSrv1 lSSEIJ; and it is further (}llDF:RE-1) that the portion of plaintirl"!s acli<>n vv:hich seeks da1nages is referred to a Spt~cial l{elcrce t<-, hear and report: and it is further (Jl~·l)El~ED that: counsel for the plaintiffs shalt \Vithin 15 days fron1 the date of this order. serve a C<)py of this ·Order \Vilh notice of entry, together \Vi th a con1plete(l infor111ation Sheet upon the Special f{cfcrce (.'lcrk in th~ M()tion S1qJport ()flicc (Ro-orn 119~1)" ·\Vho is directed to place th is n1nttcr on the calendar of the Special f{cferec s Part for tl1e earliest convenient date. '! This constitutes the decision and order of thc . courL DA TEU: 1\ugust 24, 201·8 (). PF.:TEf{ Page 14of14 15 of 15 SHEl~WO<)D .l.S.C.

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