TJ Global Mgt., LLC v KT Med. Mgt., Inc.

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TJ Global Mgt., LLC v KT Med. Mgt., Inc. 2020 NY Slip Op 32136(U) June 29, 2020 Supreme Court, Kings County Docket Number: 503035/2016 Judge: Lawrence S. Knipel 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. [*FILED: 1] KINGS COUNTY CLERK 07/01/2020 04:49 PM INDEX NO. 503035/2016 NYSCEF DOC. NO. 140 RECEIVED NYSCEF: 07/01/2020 At an IAS Term, Part 57 of t11e Supren1e Court of t11e State of New York, 11eld in and for tl1e County of Kings, at tl1e Courtl1ouse, at Civic Center, Brooklyn, Nev..' York, on the 29th day of June, 2020. PRESENT: I-ION. LAWRENCE KNIPEL. Justice. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X T.f GLOBAL MANAGEMENT, LLC, Plaintii1~ Index No. 503035/2016 -againstJ(T MEDICAL MAN1\GEMENT, fNC., DR. JOSEPH PUMA AND SORIN MEDICAL, P .C. Defendants. - - -- - - - -- - -- -- - -- - - - -- - -- - -- - -- - - -- - -- - -- -X KT MEDICAL MANAGEMEN'f, INC., JOSEPH PUMA AND SORJN MEDICAL, P.C., Third-Party Plaintiffs, -againstVLADI!vl!R GRE$SEL AND l(ARINA TILJS, Tl1ird-Party Defendants. - -- - --- -- -- - - - - - - - -- - - - - - - - - - - - - -- - - - - - - - -X NYCEF Doc. Nos. The followi11g e-filed papers read l1erein: Notice of Motion/Order to Show Cause/ Petition/Cross Motion and .Affidavits (Affinnations) Annexed,_ _ _ __ I 13. 1 14 Opposing Affidavits (Affir1nations). _ _ __ 122. 129 Reply Affidavits (Affirmations), _ _ _ _ __ 135 136 Upon the foregoing papers, plaintiff TJ Global Management, LLC (TJ Global or plaintiff), moves, i11 1notio11 sequence (1not. seq.) five, for an order, pursuant to CPLR 3025 (b), granting it leave to file and serve an amended and supplemental complaint 1 of 12 [*FILED: 2] KINGS COUNTY CLERK 07/01/2020 04:49 PM NYSCEF DOC. NO. 140 INDEX NO. 503035/2016 RECEIVED NYSCEF: 07/01/2020 na1ning additio11al defendants, and tOr costs and disbursements associated witl1 making this 1notio11. Background TJ Global brings this action against defendants/third-party plaintiffs KT Medical Management, Inc. (KT Medical), Joseph Puma (Puma) and Sorin Medical, P.C. (Sorin) (collectively defendants) for rent arrears pursuant to a lease agree1nent tor two condo1niniu1n ltnits t11at it owns located at 8686 Bay Parlcway in Brool<lyn (the subject premises). Third-party defendants Vladimir Gressel (Gressel) and Karina Tilis (Tilis), who are husl1and and wife, are TJ Global's principals. Prior to 2012, Gressel, a doctor, was the sole owner of East Shore Medical, P.C. (East Shore), which operated a medical practice at the subject premises. KT Medical had been East Shore's tnanagement arm, and prior to 2012, 'filis, East Shore's office 1nanager, \Vas J(T Medical's sole principal. On January 1, 2012, Pu111a purchased East Shore from Gressel for $3.9 million. On the same day, Salvatore Lee Puma (Salvatore), Puma's son, purcl1ased K'r Medical fl-01n Tilis tOr one dollar. transferred 50% ('rerri). oi~ Salvatore st1bsequently his sl1ares in KT Medical to his nlother, Pu1na's \Vite, Terri Pu1na 1'hereatler, Puma's accountant, }()Seph Pronesti (Pronesti) created Sorin, tra11sferred East Shore's busi11ess and assets to Sori11, and dissolved East Sl1orc. 1 Sorin beca1ne I(T Medical's sole clie11t ltntil JCT Medical ceased to do business in 2016. KT Medical, witl1 'filis as 111anaging officer, conti11ued to manage East Shore after Pu1na took In 11is affidavit in oppositio11 to plaiI1tiff's inotion, Pronesti states l1e filed Eas,t Shore's dissolution papers in Nove1nber, 2014, a11d that it was dissolved in 2015. 2 2 of 12 [*FILED: 3] KINGS COUNTY CLERK 07/01/2020 04:49 PM INDEX NO. 503035/2016 NYSCEF DOC. NO. 140 RECEIVED NYSCEF: 07/01/2020 over, and then managed Sorin, including pay111ent of all utilities, nonprofession_al salaries and rents, u11til Nove1nber, 2014, when Puma's relationship with Gressel and Tilis soured. TJ Global leased the subject premises to KT Medical. The parties dispute the nature of their lease agreement. TJ Global contends that KT Medical leased the subject pre1nises for a ten-year lerm pursuant to a written lease executed on or about April 1, 2011 by Gressel 011 behalf of TJ Global and Tilis on behalf of KT Medical. Defendants argue that this April, 2011 lease was fraudulently created and claim that KT Medical le8.scd tl1e u11its pursuant to ai1 oral agree1nent. Defendants also contend 'that Gressel and 1'ilis did not give the1n notice that tl1e alleged lease agree1nent existed and 11ever sougl1t to enfOrce its ter1ns. In addition, defencl.ants assert tl1at they were unaware, until disco\1ery et1sued, that rrJ Global ru1d East Shore entered into a 20-year leas~ agree1nent tOr the subject pretnises on Februa1y 24, 2011 at a rate of ahnost half of the amount of t11e fraudulent KT Medical lease, and that this lease was improperly used by TJ Global to obtain fu11ds tfo1n Cl1ase Ba11k. TJ Global contends that KT Medical made rental payments until October, 2012, but that in November, 2012, no rent was paid a11d that thereailer, rental paytnents becarne irregular and always fell sho1i of the a1nount due. Plaintiff alleges that after Sorin was created, Sori11 became a subtenant of the subjecf pre1nises under the lease, as it funded K'f Medical's payment of utility bills, non-professio11al salaries and rents. According to plaintiff, as of February 8, 2016, the tenants were in rental arrears of$533,000, allegedly in breach of t11e lease agreement. Defendants deny tl1at tl1ey failed to pay rent, and clai1n tl1at any irreg11larity in 1Jay1nent was caused by Tilis, but that otherwise rent was paid 3 3 of 12 [*FILED: 4] KINGS COUNTY CLERK 07/01/2020 04:49 PM NYSCEF DOC. NO. 140 INDEX NO. 503035/2016 RECEIVED NYSCEF: 07/01/2020 when due tinder an oral agree1nent between t11e parties. 011 Marcl1 3, 2016, TI Global com1nenced this actio11 for re_nt arrears solely against KT Medical. Just prior to co1npletion of discovery, TJ Global tnoved for leave to file and serve a supple1nental and a1nended corilplaint adding Pu1na and Sorin as defendants. On Ja11uary 10, 2018, tl1e court granted the 1notion. Thereafter, on March 23, 2018, KT Medical, llu1na and Sorin filed tl1e third-party st11n1nons and com_plaint, and on May 9, 2018, Gressel and Tilis filed an answer. During discovery, on September 4, 2019, Pronesti testified that KT Medical's officers, Salvatore and Terri were compensated $166,034 and $28, 100, respectively, in 2015, and $25,053 and $15,058, respectively, in 2016. At the beginning of 2016, KT Medical's total liabilities and shareholders equity was $194,798, which was also the same as its assets, but tl1at by the end of tl1e year, there were no assets recorded on its balance sheet. Pronesti testitied that K1 Medical co1npletely ceased doing business on Decetnber 31, 2016,' was dissolved effective June 8, 2018, and that it did not have any assets at the tin1e of its dissolution. Pronesti also admitted that he was aware, in 2016, of the instant action, but did not provide notice_ of the dissolution to any creditors or potential creditors of KT Medical. On September 26, 2019, plaintiff filed this motion to amend and supplement the 2 In his affidavit, Pronesti states tl1at on February 26, 2016, he created TSC Medical Managen1e11t Inc. (TSC) 011 behalf of Salvatore and Terri to repla_ce KT Medical 's fu11ctions, and that as of July 1, 2016, Sorin's payroll was on TSC's boolcs. According to Pronesti, KT Medical ceased doing business beca11se Sorin, its only client at the _tin1e, decided for valid business reasons to stop doing business with KT Medical and KT Medical had no other sources of income. 4 4 of 12 [*FILED: 5] KINGS COUNTY CLERK 07/01/2020 04:49 PM NYSCEF DOC. NO. 140 INDEX NO. 503035/2016 RECEIVED NYSCEF: 07/01/2020 cotnplaint to add Salvatore and Terri as defendants. The first t"venty-eight paragrapl1s of the proposed pleading are ide.ntical to those in tl1e operative co1nplaint. 1'he proposed Cl)Inplaint adds twelve additional paragraphs and alleges that Salvatore and Terri conspired with Pu1na and Sori11 to dissolve KT Medical, knowing that KT Medical was liable to plaintiff for rent arrears and thereby frustrating· plaintiffs atte1npt to collect a judg1nent against it ..Plaintiff also alleges that Salvatore and Terri are responsible for l('r Medical's liabilities. The proposed complaint demands a judgment jointly and severally against Kcf Medical, Pu1na, Sorin, Salvatore and 1~erri tbr $533,000 in rent arrears, vvith interests, costs and disbursements. Parties' Contentions Plaintiff's Mvtion Plaintiff co11tends that leave to a1nend should be granted because. Salvatore and 1'cn·i filed to dissolve KT Medical in 2016, wl1ile they \Vere fully aware oftl1e existence of this action~ in a11 effbrt to avoid creditors and a judgn1ent. Plai11tiff alleges that Salvatore and Terri acted in co11cert witl1 Puma a11d Sorin in failing to fund KT Medical, which \Vas Sorin's inanagement ar1n. In support of this contention, plaintiff sub111its llro11esti's deposition testimony acknowledging that TJ Global was not given notice of the dissolution. Plaintiff contends that the motio11 is ti1nely 1nade because plai11tiffs cou11scl received the transcript of'tl1e deposition on the day prior to tiling this 1notion. Defenrla11ts' Oppositio11 Defendants co11tend that plai11titTs 1notion is unti1nely as it was brought on the eve of the close of discovery, which was set to be completed by December 31, 2019. 5 5 of 12 [*FILED: 6] KINGS COUNTY CLERK 07/01/2020 04:49 PM NYSCEF DOC. NO. 140 INDEX NO. 503035/2016 RECEIVED NYSCEF: 07/01/2020 Defendants allege tl1at plaintiffs principals, Gressel and Tilis, have l(noWn of Salvatore and Terri's role in K'f Medical since 2012 and should have moved to add tl1ese defendants two years ago when they sought to a1nend the co1nplaint to add Pu1na and Sorin as defendants. Defendants argue tl1at if Salvatore and Terri were added as defenda11ts now, it "''ould set back the trial date by a year or 111ore, since eacl1 defendant has the right to retain independent cou11sel3 to initigate potential conflicts and eacl1 defenda11t would .also be entitled to discovery. Defe11dants also conte11d that plaintiff, in essence, s·eeks to "pierce the corporate veil" to 11old Salvatore and Terri responsible for K1~ Medical's debts, and that st1cl1 a cause of action is 1101 supported by the facts or law. Pronesti avers that in 2012, 2013 and 2014, Salvatore and Te1Ti \Vorked for KT Medical without pay1ne11t or wages because the 1nedical practice did not ge11erate enough ear11ings to allow the1n to be paid. According to Pro11esti, in 2013-2014, Salvatore increasingly assumed supervisory duties and control of KT Medical's affairs, and in 2015, he was in charge. Jn the first 11 months of 2015, Salvatore was allegedly only paid a $26,034.44 salary. At the end of 2015, Puma and Sorin specifically ean1'1arkcd $150 1 000 in additional wages, which Pronesti clai1ns explains the distribution of funds from KT Medical to Salvatore. Pronesti alleges that the pay1ne11ts to Salvatore and Terri were separate events and unrelated to K1' Medical's dissolution. Pro11esti also avers tl1at it was prudent for Pu1na, in order to prevent being defrauded by Gressel and Tilis, to start fresh by dissolving East Shore and KT Medical and creating Sori11 and 'fSC in tl1eir place. Defendants also contend that plaintiJT had 3 Defense coLmsel ack11ovvledges tl1at Salvatore and Terri may retain hin1 to represent tl1em. 6 6 of 12 [*FILED: 7] KINGS COUNTY CLERK 07/01/2020 04:49 PM NYSCEF DOC. NO. 140 INDEX NO. 503035/2016 RECEIVED NYSCEF: 07/01/2020 actual and/or constructive notice tl1at l(T Medical was dissolved. Defendants further argue that Gressel and Tilis have unclean hands in tl1at the lease tl1at plai11ti·ff clai1ns is tl1e operative lease is a fabricatio11, and tl1at, tl1erefore, this equitable re1nedy is unwarra11ted. Defendants allege that at tl1e ti1ne of tl1e 2012 East Shore and l(T Medical share transfers, Gressel and 'filis falsely warranted tl1at there were no financial liabilities or pending lawsuits when in actuality tl1ere were multiple pending 111edical 1nalpractice lawsuits, as vvell as a Medicare audit that resulted in Medicare demanding the corporations return $1,000,000 that was allegedly overpaid to East Shore. Defendants also clai1n tl1at in October~ 2012, Gressel tool( ottt a promissor~,' note fro1n Chase bank under the pretense that he was still the sole shareholder and officer of East Shore. In additio11, defe11dantS argt1e that the proposed aine11d1nent does 11ot propeily plead the elements of co1n1nl)n law or stattttory fraud, tl1at the pleading lacl(S the requisite specificity, and is t11erefore \Vitl1out merit. Plaintiff's Reply In reply, plal11tiff insists that the 1notio11 is tiinely. In this regard, plai11tiff sub1nits that it is defendants who have delayed this case by not providing discovery4 and by not r11aking Pronesti available for a deposition until seve11 1nontl1s after plaintiff served 11otice of his depositio11. 5 Plaintiff argues that tl1e infor1nation in Pronesti's testi1Til)ny \Vas 4 Plaintiff alleges tl1at it took several good faith attempts to resolve a discovery dispute and t\-VO motions to con1pel co111plia11ce to p'roduce documents concerning rent amounts for the location. 5 According to plaintiff, i1otice of Pronesti's deposition was served on February 28_, 20 l 9 arld returnable on March 28, 20 l 9, but due to either defense counsel or Pro11esti 's schedule, did not take place until Septe111ber 4, 2019. Plai11tiffreceived the transcript about two weeks later, and 7 7 of 12 [*FILED: 8] KINGS COUNTY CLERK 07/01/2020 04:49 PM NYSCEF DOC. NO. 140 INDEX NO. 503035/2016 RECEIVED NYSCEF: 07/01/2020 esse11tial to its seelcing leave to ainend, since that was the first ti1ne· that plaintiff learned that KT Medical was dissolved and that $244,245 of KT Medical's cash assets were distributed to its shareholders, Salvatore and Lee, long after this action for rent arrears was co1m11enced. Plaintiff denies having any prior actual or constructive notice of l(T Medical's dissolution. Plaintiff contends that the ainendment only includes allegations concerning occurrences subsequent to co1nmence111e11t of tl1is litigation which are related to its original clai1n. Plaintiff also argues that defendants have not established that they would be prejudiced by the a1nendn1ent. PlaiI1tifT fu1iher alleges tl1at Pu1na is fa1niliar with the scenario of dissolving a corporation to avoid paying a debt_. because he allegedly dissolved East Shore to avoid paying the line of credit issued by Chase bank. In addition, plaintiff alleges that the lease and its validity is an issue for trial but does not itnpact this 1notion to amend. Plaintiff argues that defendants' continuous reference to plaintiffs desire to pierce the corporate veil assumes that tl1ere is still a corporation with ·a veil to be pierced1 and that since the corporation has been dissolved_, there is no longer a corporation, and the proposed defendants, Salvatore and Terri, ope11ed tl1e1nselves up to liability by dissolving the entity and distributing its assets without notice to plaintiff. Discussion A party may amend its pleading, or supplement it by setting forth additional or subseqttent tra11sactions or occu1~·ences, at any ti1ne by leave of the court or by stipulation this motion was n1ade on Septe111ber 26, 2019. 8 8 of 12 [*FILED: 9] KINGS COUNTY CLERK 07/01/2020 04:49 PM NYSCEF DOC. NO. 140 INDEX NO. 503035/2016 RECEIVED NYSCEF: 07/01/2020 of parties (see CPLR 3025 [b]; Cullen v Torsiello, 156 AD3d 680, 681 [2d Dept 2017]). "Leave shall be freely given upon such terms as may be jtJst" (CPLR 3025 [b]; see also Culle11, 156 AD3d at 681). A court has broad discretion to grant a inotion to a1ne11d the pleadings, even after trial, when there is no actual prejudice or surprise to the opposing party (see Kimso Apartments, LLC v Gandhi, 24 NY3d 403, 411 [2014]; Murray v City of New York, 43 NY2d 400, 405 [1977], rearg dismissed 45 NY2d 966 [1978]; Cullen, 156 AD3d at 681). The passage ol'ti1ne alone, witl1out a sl1owi11g of prejudice, is i11sufficient to deny leave to amend a pleading (see Eng v DiCario, 79 AD2d 1018 [2d Dept 1981 ]). "Prejudice is more than mere exposure of the party to greater liability" (Kimso, 24 NY3d at 411) (internal quotations and brackets omitted). Rather, the party opposing the a1nendment ffilISt de111onstrate that it has been hindered in J:lreparing its case Of prevented fro1n taking so1ne 1neasure i11 support of its position (id.; National Recrititing Group, LLC v Bern Ripka LLP, 183 AD3d 831 [2d Dept 2020]). While leave to amend is freely given, it will be denied where tl1e proposed amend1nent is "palpably insufficient or patently devoid of merit" (Marcum, LLP v Silva, 117 AD3d 917, 917 [2d Dept 2014]; Trataros Construction, Inc. v New York City Housing Authority, 34 AD3d 451, 452 [2d Dept 2006]). A 1notion to amend or supple1nent tl1e pleadings must be acco1npanied by tl1e proposed amended or supplemental pleading clearly showing the changes or additions made to the pleading (CPLR 3025 [b]; Drice v Queens County District Attorney, 136 AD3d 665 [2d Dept 2016]). Here, plaintiff has complied With this mandate by submitting a proposed a1nended and supple1nental co1nplaint clearly delineating the changes and 9 9 of 12 [*FILED: 10] KINGS COUNTY CLERK 07/01/2020 04:49 PM NYSCEF DOC. NO. 140 INDEX NO. 503035/2016 RECEIVED NYSCEF: 07/01/2020 additions to the operative complaint. 1'he court also fi11ds that plaintiffs 1notion to arnend was tirne1y rnade. Plai11tiff claims that it only learned of KT Medical's dissolution and of the payments to Salvatore ai1d Terri in Septe1nber, 2019, whe11 Puma's accountant, Pronesti, was deposed. Plaintiff furtl1er asserts tl1at Pronesti's deposition \Vas delayed due to Pro11esti's and defense counsel's schedule. While defendants claim that plaintiff had actual or constructive notice of K"f Medical's dissolution wl1en it i11oved to atnend tl1e original co1nplaint, defendants do not provide evidence of plaintiffs knowledge. Indeed, Pronesti testified that he did not notify plaintiff of KT Medical's dissolution or of the fact that Salvatore and Terri received payments of over $200,000 from KT Medical in 2015 and 2016. Additionally, defendants do not dispute that they were responsible for the half-year delay in Pronesti's deposition. The court has also reviewed the docket and notes that the other delays in 1noving the case to trial are attributable equally to plaintiff and defe11dant, as both parties have been the subject of motions to compel discovery (see mot. seq. two and three). In any event, the 1nere passage oftitne is insufficient to deny leave to an1end (see Eng, 79 AD2d at I 018), and defendants have not established tl1at they would be prejudiced, hindered in prepari11g tl1eir case, or prevented fro1n talcing sorne 1ncas11re if the pleading were allowed (see Kimso, 24 NY3d at 411). Defendants merely argue that Salvatore and Terri would have to hire counsel and obtain discovery, which vvo1ild set the case back another year. Tl1is is a ti1neliness, ratl1ex than a prejudice, argu1nent. The proposed a1nended and supplemental co1nplaint pleads a11 action for rent arrears arising out of TJ Global's lease with KT Medical, and that KT Medical was 10 10 of 12 [*FILED: 11] KINGS COUNTY CLERK 07/01/2020 04:49 PM NYSCEF DOC. NO. 140 INDEX NO. 503035/2016 RECEIVED NYSCEF: 07/01/2020 wrongfully defUnded a11d dissolved in the middle of this litigation without notice to 1'J Global in order to avoid creditors, such that TJ Global no\v seeks to collect the debt personally from Krf's principals, Salvatore and Terri. Wl1ile the proposed amend1nent 1nay be inarttU.lly dratted, it can11ot be said tl1at it is "palpably i11sufficient or patently devoid of merit" (Marcum, 117 AD3d al 917; Trataros, 34 AD3d at 452). Moreover, plaintiff "is not required- to establish the 1nerit of the proposed a1nend1nent in tl1e first instance" (Lucido, 49 AD3d at 227; see also National Recruiting Group, 183 AD3d 831). Defendants' argu1nents concerning tl1e allegedly frattdulent lease between TJ Global and KT Medical, as well as Gressel and Tilis' other allegedly ffaudttlent acts, are 1natters for tl1e trier of fact to resolve. 'fhe court is confident that, once the a1nended pleading is :filed and served, the parties \vill proceed with interposing a response and with excl1a11ge of discovery expeditiously, as it appears that the bulk of discovery has already been completed. The court l1as also considered the remainder of the parties' conte11tions, a11d ·finds the1n to be without 111erit, Accordi11gly, it js ORDERED that plaintiffs motion, in 1not. seq. five, for an order, pttrsuant to CPLR 3025 (b), granting it leave to file and serve the proposed amended and supple1nental co111plaint is granted; and it is fu1ther 11 11 of 12 [* 12] 12 of 12 ORDERED that, in exercise of the court's discretion, plaintiffs request for costs and disburse1nents associated witl1 this 1notion is denied. Tl1is constitutes the decision and order of the court. ENTER: \ J.S.C./~-~ I\~ Justice Lawrence Knipe! NYSCEF DOC. NO. 140 FILED: KINGS COUNTY CLERK 07/01/2020 04:49 PM RECEIVED NYSCEF: 07/01/2020 INDEX NO. 503035/2016

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