373-381 PAS Assoc., LLC v Ocean Mgt. Corp.

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373-381 PAS Assoc., LLC v Ocean Mgt. Corp. 2022 NY Slip Op 32993(U) September 6, 2022 Supreme Court, New York County Docket Number: Index No. 158331/2021 Judge: Mary V. Rosado 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. I INDEX NO. 158331/2021 RECEIVED NYSCEF: 09/07/2022 DOC. NO. 27 NY:CEF ~ SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 33 --------------------X 373-381 PAS ASSOCIATES, LLC, INDEX NO. Plaintiff, MOTION DATE 158331 /2021 01/14/2022 - V - MOTION SEQ. NO. OCEAN MANAGEMENT CORP., MAJID KAHEN, 001 Defendant. DECISION+ ORDER ON MOTION ---------------------X HON. MARY V. ROSADO: The following e-filed documents, listed by NYSCEF document number (Motion 001) 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 19,20,21,22,23,24,25,26 were read on this motion to/for I AMEND CAPTION/PLEADINGS Oral Argument took place on June 15, 2022 with Joshua Kopelowitz and Hanna Reisinger appearing on behalf of Plaintiff 373-381 PAS Associates, LLC ("Plaintiff') and Zachary Kuperman appearing on behalf of proposed defendants Foxwood Realty, LLC ("Foxwood") and Alphabet Plaza, LLC ("Alphabet"). Upon oral argument and the foregoing documents, it is decided and ordered as follows. I. Factual and Procedural Background Plaintiff filed its Complaint on September 9, 2021 (NYSCEF Doc. 1). In the Complaint, Plaintiff alleges it owns the building located at 381 Park Avenue South, New York, New York (the "Building") (id. at ,r 4 ). Defendant Ocean Management Corp. ("Ocean") allegedly is the tenant of suite 621 in the Building per a lease agreement dated April 7, 201 7 which expired on May 31, 2022 (the "Lease"). It is alleged that Defendant Majid Kahen ("Guarantor") guaranteed the Lease pursuant to a written guaranty (id. at ,i,r 11-12). Plaintiff alleged that Ocean failed to pay rent pursuant to the terms of the Lease since September 30, 2021, and Guarantor has not paid for any 158331/2021 373-381 PAS ASSOCIATES, LLC vs. OCEAN MANAGEMENT CORP. ET AL Motion No. 001 [* 1] 1 of 4 Page 1 of 4 INDEX NO. 158331/2021 RECEIVED NYSCEF: 09/07/2022 NYSCEF DOC. NO. 27 of Tenant's default (see generally NYSCEF Doc. 1). On November 8, 2021, a stipulation of discontinuance was entered into between Plaintiff and attorney for Ocean and Guarantor which discontinued the action against Guarantor without prejudice (NYSCEF Doc. 5). To date, Ocean has not filed any responsive pleading to Plaintiff's Complaint. On January 6, 2022, Plaintiff moved to amend the Complaint (NYSCEF Doc. 6). Plaintiff seeks to amend the Complaint to assert new causes of action and adding new defendants Foxwood I and Alphabet (NYSCEF Doc. 7 at ,i 7). Plaintiff alleges in the proposed Amended Complaint that Foxwood and Alphabet are the alter egos of Ocean and seeks to pierce the corporate veil to hold Foxwood and Alphabet liable for Ocean's default (NYSCEF Doc. 10). Mr. Zachary Kuperman, who also represents Defendants Ocean and Guarantor, filed opposition papers to Plaintiff's motion on behalf of non-parties Foxwood and Alphabet even ' though Foxwood and Alphabet did not seek leave to intervene (NYSCEF Doc. 21 ). Defendant Ocean, which still has not filed any responsive pleading despite being represented by Mr. Kuperman, has filed no opposition to Plaintiff's motion. Plaintiff argues in reply that pursuant to CPLR 1013, F oxwood and Alphabet are nonparties who may not appear to oppose this motion without the Court's permission to intervene (NYSCEF Doc. 24). 1 Plaintiffs further argue that Plaintiffs are not required to demonstrate their pleadings are meritorious at this stage, but only that its pleadings are not palpably insufficient. Although Foxwood and Alphabet submitted a memorandum of law, as non-parties who never moved for leave to intervene the Court will not entertain their opposition. To allow a non-party to simply file a notice of appearance to launch a~ opposition to a motion in an action would render CPLR §§ IO 12 and IO 13 voi_d i~ many situation~. Moreover, Foxwood and Alphabet have not cited to any on-point and binding legal authority m support of their position. Given the lack of legal authority supporting Foxwood and Alphabet's in~er~ention argume~~' and the express provisions of CPLR §§ IO 12 and IO 13, the Court rejects Foxwood and Alphabet s improper oppos1t1on papers. 1 158331/2021 373-381 PAS ASSOCIATES, LLC vs. OCEAN MANAGEMENT CORP. ET AL Motion No. 001 [* 2] 2 of 4 Page 2 of 4 INDEX NO. 158331/2021 RECEIVED NYSCEF: 09/07/2022 NYSCEF DOC. NO. 27 II. Discussion A. Amend Pleadings Standard Leave to amend pleadings is freely granted in the absence of prejudice if the proposed amendment is not palpably insufficient as a matter oflaw (Mashinksy v Drescher, 188 AD3d 465 [1st Dept 2020]). A party opposing a motion to amend must demonstrate that it would be substantially prejudiced by the amendment, or the amendments are patently devoid of merit (Greenburgh Eleven Union Free School Dist. V National Union Fire Ins. Co., 298 AD2d 180, 181 [1st Dept 2002]). Delay alone is not sufficient to deny leave to amend (Johnson v Montefiore Medical Center, 203 AD3d 462 [1st Dept 2022]). B. Plaintiff is granted leave to Amend their Complaint Plaintiff is granted leave to serve its proposed amended Complaint. The proposed amended I Complaint will not prejudice any party or proposed party as there has not yet been any discovery exchanged, let alone a responsive pleading filed. Moreover, Plaintiff does not need to establish the merit of its proposed allegations, but only show that they are not clearly devoid of merit (Fairpoint Cos., LLC v Vella, 134 AD3d 645 [1st Dept 2015]). To state a veil piercing claim, a plaintiff must show that (1) the owner of a corporation exercised complete domination of the corporation involved in an unjust transaction, and (2) the corporation was used to commit a fraud or wrong against a plaintiff resulting in plaintiff's injury (id.). Here, it is alleged, upon information and belief, that Ocean exercised complete control and dominance of Foxwood and Alphabet and that Foxwood and Alphabet were used as an instrumentality to evade rent payments. The Court finds these allegations are not clearly devoid of merit or palpably insufficient. As leave to amend is freely given, there has not been substantial delay, no party will be prejudiced, and the pleadings are not clearly devoid of merit, Plaintiff's motion for leave to amend its pleadings is granted. 158331/2021 373-381 PAS ASSOCIATES, LLC vs. OCEAN MANAGEMENT CORP. ET AL Motion No. 001 [* 3] 3 of 4 Page 3 of4 INDEX NO. 158331/2021 I RECEIVED NYSCEF: 09/07/2022 NYSCEF DOC. NO. 27 I Accordingly, it is hereby ORDERED that the plaintiffs motion for leave to amend the complaint herein is granted, I and the amended complaint in the proposed form annexed to the moving papers shall be deemed served upon service of a copy of this order with notice of entry thereof; and it is further ORDERED that the defendant shall serve an answer to the amended complaint or otherwise respond thereto within 20 days from the date of said service; and it is further ORDERED that counsel are directed to appear for a preliminary conference via Microsoft Teams on Wednesday, October 26, 2022, at 9:30 a.m. This constitutes the Decision and Order of this Court. 9/6/2022 RY V. ROSADO, J.S.C. DATE CASE DISPOSED CHECK ONE: x GRANTED • x DENIED NON-FINAL DISPOSITION GRANTED IN PART APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 158331/2021 373-381 PAS ASSOCIATES, LLC vs. OCEAN MANAGEMENT CORP. ET AL Motion No. 001 [* 4] 4 of 4 • • OTHER REFERENCE Page 4 of 4

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