OPMI Bus. Sch. Inc. v Lisa Lin Yang
Annotate this CaseDecided on October 15, 2019
Supreme Court, New York County
OPMI Business School Inc., Plaintiff,
against
Lisa Lin Yang, Defendant.
655550/2017
Plaintiff:
Drohan Lee LLP
680 Fifth Avenue, 10th Floor
New York, NY 10019
By: Vivian R Drohan, Esq.
Dorsey & Whitney LLP
51 W 52nd St.
New York, NY 10019
By: Terence Michael Schroeder, Esq.
Defendant:
Law Office of Z. Tan PLLC
3907 Price St. Ste 3b,
Flushing, NY 11354
By: Bingchen Li, Esq.
Robert R. Reed, J.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 33, 34, 35, 36 were read on this motion for PREL INJUNCTION/TEMP REST ORDR
Upon the foregoing documents, it is ordered that this motion is granted in part.
Plaintiff moves, pursuant to CPLR 6301, 6311, and 6313, for a preliminary injunction to enjoin defendant from engaging in specific acts with respect to plaintiff's corporate bank accounts.
A temporary restraining order was granted on August 29, 2017.
On or about June 17, 2015, corporate plaintiff OPMI Business School Inc. (OPMI), defendant (former shareholder of OPMI) and UEM LLC (a New York limited liability company) entered into a share purchase agreement in which defendant sold 100% of the issued and outstanding shares of OPMI. The transaction was finalized on or about November 3, 2015, and UEM became sole shareholder of OPMI, thereby legally retaining the sole right, title and interest to all OPMI's assets and liabilities. After completion of the transaction, OPMI temporarily retained defendant as a director/corporate officer until on or about November 3, 2016 and as a principal designated school officer of OPMI until August 6, 2017. Plaintiff asserts that [*2]defendant's retention in the various positions was to assist with the transition in ownership and to receive assistance in educational matters. OPMI later discovered that, even after defendant's retention ended and the transfer of ownership was complete, defendant remained a signatory on multiple of OPMI's corporate accounts. Plaintiff alleges that it attempted to change the signatories on the bank accounts, but that the bank required the permission and consent of defendant. Plaintiff now alleges that defendant has converted OPMI funds and seeks a preliminary injunction to enjoin defendant from further alleged conversion of OPMI funds.
Preliminary relief is a drastic remedy that will not be granted unless a clear right to it is established under the law and upon undisputed facts found in the moving papers, and the burden of showing an undisputed right rest upon the movant" (Anastasi v. Majopon Realty Corp., 181 AD2d 706). In order to prevail on a motion for a preliminary injunction, the movant must demonstrate by clear and convincing evidence (1) a likelihood of success on the merits, (2) irreparable injury absent the granting of the preliminary injunction, and (3) that a balancing of the equities favors the movant's position" (Apa Sec., Inc. v. Apa, 37 AD3d 502). The granting of such relief is committed to the sound discretion of the motion court (Harris v. Patients Med., P.C., 169 AD3d 433).
In applying the aforementioned standards, the court finds that the movant has made sufficient showing to warrant a preliminary injunction enjoining defendant from engaging in specific acts with regard to plaintiff's TD Bank N.A. corporate bank accounts. Plaintiff's motion papers and supporting materials provided to the court establish that defendant's continued presence as a signatory on plaintiff's corporate bank accounts may undermine the integrity and efficient monitoring and usage of said accounts. Plaintiff has demonstrated that the purchase of defendant's business by UEM was finalized, and that sole ownership of OPMI's title and interest to all its assets and liabilities no longer lie with defendant. Thus, defendant has no legal claim to OPMI's assets. Defendant has presented no evidence to convince the court otherwise.
Plaintiff has also shown that the decision to retain defendant as a director/corporate officer was through a specified period—on or about November 3, 2016 to on or about August 6, 2017. Plaintiff's concerns regarding defendant's continued access to its corporate accounts is a valid one that the court cannot ignore. Defendant's continued access to plaintiff's accounts is unnecessary and is contrary to plaintiff's efficient operation of its business. In the court's assessment of plaintiff's submitted materials, defendant's position as a signatory on plaintiff's corporate accounts will cause irreparable injury if it goes unattended. Defendant's access may lead to an irreversible conversion of plaintiff's corporate assets, undermine plaintiff's proven entitlement to said accounts, and undercuts plaintiff's ability to administer its accounts. Plaintiff has also shown that a balance of the equities lies in its favor. Defendant has not provided the court with any evidence to show that she will, in any way, be disadvantaged or prejudiced by the granting of the preliminary injunction. It is plaintiff who will be prospectively disadvantaged if defendant is allowed to remain as a signatory on corporate accounts which plaintiff has proven defendant has no legal right to.
Defendant opposes plaintiff's motion for preliminary injunction. To do so, defendant submits a "cross-motion for summary judgment in lieu of complaint." In said cross-motion, defendant attempts to join UEM LLC as a third-party to the action by seeking a summary judgment, pursuant to CPLR 3213, on a breach of contract claim. Ultimately, defendant also includes in said cross-motion her opposing arguments to plaintiff's preliminary injunction motion. The court considers defendant's cross-motion pursuant to CPLR 3213 to be a nullity. UEM LLC is not a defendant or other party to this action. Defendant may not, to respond to a motion by a party in the current action, initiate a third-party action by way of a cross-motion pursuant to CPLR 3213. A CPLR 3213 motion, indeed, initiates its own action, and requires its own filing and the purchase of an index number, together with the service of its own summons. To the extent the court considers the substance of defendant's opposition—despite its plain procedural defects—none of defendant's arguments are persuasive. Once the transfer of title of plaintiff corporation was complete, defendant no longer had any legitimate basis to have access, [*3]let alone to control access, to plaintiff's bank accounts. If defendant believes she has a monetary claim against UEM LLC, she can attempt to make that claim in a separate lawsuit against that non-party. That has nothing to do, however, with the control of the financial accounts of plaintiff—which is the principal purpose of the motion now before the court.
To the extent plaintiff seeks to have defendant directed to restore funds to its bank accounts, plaintiff has failed to demonstrate by admissible evidence a likelihood of success on the merits or irreparable harm.
Accordingly, it is
ORDERED that the portion of plaintiff's motion seeking to enjoin defendant Lisa Lin Ying from (a) withdrawing, transferring, secreting, pledging, mortgaging, hypothecating or otherwise disposing, accessing or using any of the funds contained in, and (b) otherwise transferring, closing, or liquidating, the following accounts maintained at Nominal Defendant T.D. Bank, N.A: (i) TD Business Simple Checking, Account No. 430-6813068, in the name of OPMI Business School Inc, 116 John St. FL 2, New York, NY 10036, (ii) TD Business Premier Checking, Account No. 430-6813331, in the name of OPMI Business School Inc, 116 John St. Fl 2, New York, NY 10036, and (iii) TD Small Business Money Market Plus, Account No. 430-6813422, in the name of OPMI Business School Inc, 116 John St. FL 2, New York, NY 10036 (together with the Simple Checking Account and the Premier Checking Account, each an "Account" and collectively the "Account"), is granted; and it is further
ORDERED that the portion of plaintiff's motion seeking to restrain TD Bank from (i) honoring, fulfilling, or acting upon, to any extent whatsoever, any request from Lin Ying regarding any disposition of any kind regarding the Accounts or funds contained in the Accounts, or (ii) disposing of the funds in the Accounts in any manner whatsoever except as directed by the current directors of OPMI, Jun Yang and Hinman Au, is granted; and it is further
ORDERED that the portion of plaintiff's motion seeking to enjoin defendant Lin Yin and TD Bank from destroying, disposing of, amending or otherwise altering any and all records, whether physical or electronic, relating to the Accounts or this Order to Show Cause, is granted; and it is further
ORDERED that the portion of defendant's motion seeking to direct defendant Lin Ying to promptly restore all funds to the Accounts that Lin Ying improperly withdrew, transferred or otherwise removed from the Accounts is denied; and it is further
ORDERED that counsel are directed to appear for a status conference in Part 43, at Room 412 at 60 Centre Street, on November 14, 2019 at 11:00 a.m.
This constitutes the Decision and Order of this court.
Dated: October 15, 2019
Hon. Robert R. Reed, J.S.C.
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