FILED: NEW YORK COUNTY CLERK 05/03/ :00 PM INDEX NO /2016 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 05/03/2016

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1 FILED NEW YORK COUNTY CLERK 05/03/ PM INDEX NO /2016 NYSCEF DOC. NO. 14 RECEIVED NYSCEF 05/03/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK X HELGA ARMINAK, ARMIN ARMINAK, HRA HOLDING CORP., and NC HOLDING, LLC, Plaintiffs, vs. TRIMAS CORP., RIEKE-ARMINAK CORP., RIEKE CORP. and ARMINAK & ASSOCIATES, LLC, Defendants X Index No /2016 Justice Kornreich Motion Sequence 1 MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS MOTION FOR ACCELERATED ADJUDICATION REED SMITH LLP Steven Cooper Melissa Rubenstein Danielle Marlow Ian Turetsky 599 Lexington Avenue New York, New York Tel. (212) Fax. (212) Attorneys for Defendants TriMas Corporation, Rieke-Arminak Corporation, Rieke Corporation, and Arminak & Associates, LLC 1 of 13

2 TABLE OF CONTENTS Page PRELIMINARY STATEMENT... 1 PROCEDURAL HISTORY... 3 ARGUMENT... 6 CONCLUSION i 2 of 13

3 TABLE OF AUTHORITIES Page Cases In re East Freight Ways, Inc., 577 F.2d 175 (2d Cir. 1978)... 9 Lanza v. Penthouse Int l, 79 A.D.2d 957 (1st Dep t 1981)... 8 Ransom v. St. Regis Mohawk Education and Community Fund, 86 N.Y.2d 553 (1995)... 9 Salvano v. Merrill Lynch, 85 N.Y.2d 173 (1995)... 8 Wheelock v. Lee, 74 N.Y. 495 (1878)... 8 Other Authorities David D. Siegel, N.Y. Prac. 12 (5th ed.)...8 Lia Iannetti, New Rule on Accelerated Adjudication Procedures in New York State Courts, 32 Alternatives to High Cost Litig Memorandum From John W. McConnell (Counsel, Office of Court Administration) (Dec. 6, 2013)...7 ii 3 of 13

4 Defendants TriMas Corporation ( TriMas ), Rieke-Arminak Corporation ( Rieke- Arminak ), Rieke Corporation ( Rieke ) and Arminak & Associates, LLC ( AA, and, together with TriMas, Rieke-Arminak and Rieke, collectively, Defendants ), submit this Memorandum of Law in Opposition to the Motion by Plaintiffs Helga Arminak, Armin Arminak, HRA Holding Corp. ( HRA ) and NC Holding Corp. ( NC, and, together with Helga Arminak, Armin Arminak and HRA, collectively, Plaintiffs ) for Accelerated Adjudication of this action (the Motion ). PRELIMINARY STATEMENT This action relates to claims arising from agreements executed in 2012 and 2014 in connection with the purchase of Plaintiffs company, Arminak & Associates, LLC. As Plaintiffs acknowledge, they received $110 million in connection with the purchase. See Complaint, Index No /2016, NYSCEF Doc. No. 2, 42, 72. Despite this generous payout, Plaintiffs have gone on a litigation spree to shake down Defendants, and avoid the restrictive covenants they agreed to in connection with the sale of their business, by commencing at least three other separate proceedings against several of these same Defendants related to this same subject matter. In this action, Plaintiffs seek, inter alia (i) an additional $7 million pursuant to an earnout provision contained in the 2014 purchase agreement, which they unquestionably are not entitled to, because the purchased entity, AA, did not meet the requisite financial targets; (ii) declaratory relief invalidating the restrictive covenants that Plaintiffs expressly agreed to as a term of the $110 million purchase; and (iii) other damages and relief. Id., Complaint, Notably, this action was commenced after Rieke-Arminak and AA filed their own action on February 3, 2016, by a Summons with Notice, which similarly seeks declaratory relief, injunctive relief and damages relating to, inter alia (i) the earnout provision in the of 13

5 agreement; and (ii) the restrictive covenants contained in the 2102 and 2014 agreements. 1 See Index No /2016, NYSCEF Doc. No. 1. In addition to these two actions in New York, within a span of less than two months, Plaintiffs also filed (i) another action regarding this same subject matter in California in violation of the forum selection clause in the relevant agreements designating New York as the exclusive jurisdiction for such claims; (ii) an action against AA relating to a lease in California; and (iii) a lawsuit against AA, among others, for slander, invasion of privacy, and similar claims in California. In total, five actions have been commenced in a two month span 4 of which were commenced by Plaintiffs here. And, in the action in California respecting the same subject matter, Helga Arminak, Armin Arminak, and Roger Adbadjian (Helga Arminak s brother) have moved for a preliminary injunction to prevent enforcement of the same restrictive covenants before this Court. Despite the proliferation of lawsuits on the same subject matter, and this being the second filed action in New York, Plaintiffs bring their present Motion for Accelerated Adjudication. This Motion is baseless, and simply designed to harass. 2 Application of the accelerated adjudication procedures set forth in Rule 9 of the Commercial Division Rules ( Rule 9 ) expressly requires written consent of the parties. Plaintiffs concede that no such consent was obtained here. See Motion, pp. 2, 3-4. Plaintiffs also fail to demonstrate any exigency or other justification for the extreme relief that they seek. There is simply no reason for accelerated adjudication of this later-filed, clearly duplicative action. 1 TriMas and Rieke are not parties to the first filed action because they were not parties to the 2012 and 2014 agreements. See Complaint, Index No /2016, NYSCEF Doc. No. 2, 42 and Exhibits Plaintiffs have also served voluminous discovery both in New York and in California, including document requests, interrogatories, and requests to admit, further demonstrating Plaintiffs intent to harass. 2 5 of 13

6 As demonstrated below, the Motion is baseless on its face and should be denied. PROCEDURAL HISTORY On February 3, 2016, Rieke-Arminak and AA filed the first lawsuit regarding the subject matter of this action by service and filing of a Summons with Notice (Rieke-Arminak Corporation et al v. Helga Arminak et al., Index No /2016, NYSCEF Doc. No. 1, the First New York Case ). Service of process was effectuated upon all Defendants by February 8, See Index No /2016, NYSCEF Doc. Nos On February 11, 2016, Boies, Schiller & Flexner LLP filed a Notice of Appearance as counsel for Defendants and a demand for a Complaint. See Index No /2016, NYSCEF Doc. No. 2. Almost two weeks after the First New York Case was commenced, Helga Arminak, her husband Armin Arminak, and her brother Roger Abadjian filed a highly similar lawsuit against AA, Rieke-Arminak and certain of their officers and directors in the Superior Court of the State of California entitled Helga Arminak, et al. v. Arminak & Associates, LLC, et al., Case No. BC (Cal. Supr. Ct., Los Angeles County), seeking to invalidate the same restrictive covenants in the 2012 and 2014 purchase agreements, and damages for alleged breaches of their ancillary employment contracts with AA (the First California Case, attached to the Affirmation of Steven Cooper, sworn to May 3, 2016 ( Cooper Aff. ), as Exhibit A ). Helga Arminak, Armin Arminak and Roger Abadjian brought the First California Case despite the fact that, as they acknowledge in the Complaint in this very action, the relevant agreements contain a forum selection clause designating New York as the exclusive jurisdiction for the litigation of disputes arising under the agreements. See Complaint, Index No /2016, NYSCEF Doc. No. 2, 14 ( In connection with the Unit Purchase Agreement at issue in this case, the parties agreed to certain Dispute Resolution Procedures, including that the parties agree that all litigation shall be brought in either the state or federal courts located in 3 6 of 13

7 New York, New York. ) (emphasis added). A motion to dismiss the First California Case was filed on March 23, 2015 on grounds of forum non conveniens, based on the forum selection and choice of law provisions in the relevant agreements, and that the California court should defer to the First New York Case (the Motion to Dismiss ). See Cooper Aff., Exhibit B. On April 4, 2016, or almost two months after Rieke-Arminak and AA commenced the First New York Case, Plaintiffs commenced their present action in New York (the Second New York Case ). The Defendants in the Second New York Case are Rieke-Arminak, AA, Rieke, and TriMas, 3 and the lawsuit is duplicative of both the First New York Case and the First California Case, as it involves similar parties and likewise seeks a declaratory judgment concerning the enforceability of the restrictive covenants. Despite the clear overlap between this case and the First New York Case, in the Request for Judicial Intervention ( RJI ) Plaintiffs filed in this action, Plaintiffs failed to designate the First New York Case as a related case (see Index No /2016, NYSCEF Doc. No. 5). Defendants had to designate this action as a related case in the RJI they filed in the First New York Case (see Index No /2016, NYSCEF Doc. Nos ). On April 4, 2016, the same day they commenced this action, entities controlled by Helga Arminak commenced yet another action against AA in the Superior Court of California seeking damages for AA s alleged failure to comply with certain covenants in the lease for its current office space (the Second California Case ). See Cooper Aff., Exhibit C. Finally, on April 19, 2016, Helga Arminak and Armin Arminak filed yet another action against AA and an AA officer in the Superior Court of California, seeking damages for alleged 3 As noted, neither TriMas nor Rieke are party to the relevant agreements yet Plaintiffs repeatedly insist on naming them as defendants. This is clearly an effort to harass. 4 7 of 13

8 slander, invasion of privacy, and infliction of emotional distress (the Third California Case ). See Cooper Aff., Exhibit D. Thus, Helga Arminak, her relatives, and their affiliates have filed four separate actions, in multiple jurisdictions, against the same or related defendants. 4 Three existing lawsuits relate to the same factual and legal issues, and one of those lawsuits was improperly brought in California, in contravention of the forum selection clause Plaintiffs cite and acknowledge is valid and binding. In light of these duplicative and wasteful filings, on April 11, 2016, Rieke-Arminak and AA filed a motion in the First New York Case seeking an extension of time to serve a Complaint until disposition of the Motion to Dismiss the First California Case (see Index No /2016, NYSCEF Doc. Nos ). This extension was sought, in light of the numerous and duplicative lawsuits filed regarding this same subject matter, to enable the courts and parties to determine the appropriate forum for these disputes. 5 See Index No /2016, NYSCEF Doc. No. 21. Instead of awaiting the outcome of the Motion to Dismiss in California, Plaintiffs now attempt to push ahead with this belatedly filed Second New York Case by means of their present Motion for Accelerated Judgment. There is no basis under law for the present Motion, as Defendants have not consented to accelerated adjudication, which is expressly required by Rule 9. Granting accelerated adjudication pursuant to Plaintiffs present Motion would deprive Defendants of important legal rights without their consent. Further, any claim by Plaintiffs of exigency is belied by Plaintiffs delay in bringing this action until years after execution of the covenants at issue, and the fact that 4 On April 22, 2016, counsel for Helga and her affiliates also served a demand to inspect Defendants books and records in connection with the earnout payment provided for in the 2014 agreement. 5 Rieke-Arminak and AA set June 22, 2016 as the return date for their motion to extend the time to serve the Complaint not, as Plaintiffs suggest, in an effort to delay but, rather, because the hearing on the Motion to Dismiss in the First California Case is scheduled for June 21, of 13

9 if they were truly faced with irreparable harm, they could seek preliminary injunctive relief. Finally, proceeding on an accelerated basis in this action when there is already a first-filed action in this Court (and numerous other actions regarding the same subject matter) is unnecessary and wasteful. The Motion should therefore be denied in all respects. ARGUMENT Rule 9 of the Rules of the Commercial Division of the Supreme Court which is the basis for Plaintiffs present Motion for Accelerated Adjudication, provides as follows Rule 9. Accelerated Adjudication Actions. (a) This rule is applicable to all actions, except to class actions brought under Article 9 of the CPLR, in which the court by written consent of the parties is authorized to apply the accelerated adjudication procedures of the Commercial Division of the Supreme Court. One way for parties to express their consent to this accelerated adjudication process is by using specific language in a contract, such as Subject to the requirements for a case to be heard in the Commercial Division, the parties agree to submit to the exclusive jurisdiction of the Commercial Division, New York State Supreme Court, and to the application of the Court s accelerated procedures, in connection with any dispute, claim or controversy arising out of or relating to this agreement, or the breach, termination, enforcement or validity thereof. (b) In any matter proceeding through the accelerated process, all pre-trial proceedings, including all discovery, pre-trial motions and mandatory mediation, shall be completed and the parties shall be ready for trial within nine (9) months from the date of filing of a Request of Judicial Intervention (RJI). (c) In any accelerated action, the court shall deem the parties to have irrevocably waived (1) any objections based on lack of personal jurisdiction or the doctrine of forum non conveniens; (2) the right to trial by jury; (3) the right to recover punitive or exemplary damages; (4) the right to any interlocutory appeal; and (5) the right to discovery, except to such discovery as the parties might otherwise agree or as follows (i) There shall be no more than seven (7) interrogatories and five (5) requests to admit; (ii) Absent a showing of good cause, there shall be no more than seven (7) discovery depositions per side with no deposition to exceed seven (7) hours in length. Such 6 9 of 13

10 depositions can be done either in person at the location of the deponent, a party or their counsel or in real time by any electronic video device; and (iii) Documents requested by the parties shall be limited to those relevant to a claim or defense in the action and shall be restricted in terms of time frame, subject matter and persons or entities to which the requests pertain. (d) In any accelerated action, electronic discovery shall proceed as follows unless the parties agree otherwise (i) the production of electronic documents shall normally be made in a searchable format that is usable by the party receiving the e-documents; (ii) the description of custodians from whom electronic documents may be collected shall be narrowly tailored to include only those individuals whose electronic documents may reasonably be expected to contain evidence that is material to the dispute; and (iii) where the costs and burdens of e-discovery are disproportionate to the nature of the dispute or to the amount in controversy, or to the relevance of the materials requested, the court will either deny such requests or order disclosure on condition that the requesting party advance the reasonable cost of production to the other side, subject to the allocation of costs in the final judgment. (emphasis added). Rule 9 makes clear that both parties must consent to accelerated adjudication procedures. See also Memorandum From John W. McConnell (Counsel, Office of Court Administration) (Dec. 6, 2013) ( Proposed Rule 9(a) provides that the parties may consent in writing to submit their disputes to the Commercial Division's accelerated adjudication process, and sets forth specific consent language for inclusion in any contract between the parties. (emphasis added); Lia Iannetti, New Rule on Accelerated Adjudication Procedures in New York State Courts, 32 Alternatives to High Cost Litig. 96 ( The new Rule 9 allows the parties to any commercial dispute exceeding $500,000 to resolve their dispute more expeditiously and cost effectively by including in their contract specific accelerated adjudication procedure language... The parties may also agree to accelerated adjudication procedures by filing a stipulation with the court once a dispute has arisen. ) (emphasis added); David D. Siegel, N.Y. Prac. 12 (5th ed.) 7 10 of 13

11 ( This new Uniform Rule [Rule 9] provides parties with an optional accelerated procedure under which their commercial division case can be handled. ) (emphasis added). The case law likewise states that accelerated proceedings, such as those provided by Rule 9, require the consent of the parties. See Lanza v. Penthouse Int l, 79 A.D.2d 957 (1st Dep t 1981) (reversing trial court s order of immediate trial and accelerated discovery, stating Special Term was without authority in these circumstances to grant either an immediate trial or accelerate discovery without the consent of the parties. ) (emphasis added); Salvano v. Merrill Lynch, 85 N.Y.2d 173 (1995) (reversing trial court s order of expedited arbitration, holding that trial court lacked authority to order the parties to proceed absent any provision explicitly authorizing expedited arbitration in the parties agreements ). Both parties must consent to Rule 9 s application because it deprives the parties of important, in many cases constitutional rights, including (i) the right to object based on lack of personal jurisdiction or the doctrine of forum non conveniens; (ii) the right to trial by jury; (iii) the right to recover punitive or exemplary damages; (iv) the right to any interlocutory appeal; and (v) the right to discovery, except to such discovery as the parties might otherwise agree. A party cannot be deprived of these numerous and essential rights without its consent. See, e.g., Wheelock v. Lee, 74 N.Y. 495 (1878) ( At all events there must be some unequivocal act or consent showing an intention to abandon the constitutional right [to trial by jury] ); Ransom v. St. Regis Mohawk Education and Community Fund, 86 N.Y.2d 553 (1995) (Indian tribe could not be subject to personal jurisdiction of New York Courts and denied sovereign immunity without its consent); In re East Freight Ways, Inc., 577 F.2d 175, n.14 (2d Cir. 1978) ( Summary proceedings are expedited and simplified judicial proceedings before the bankruptcy judge of 13

12 [if] an adverse party is unwilling to consent to summary jurisdiction, then the trustee must initiate more formalized plenary proceedings. ). Plaintiffs needlessly bring this Motion despite the fact that as they admit, the requisite consent is lacking here. See Motion, pp. 2, 3-4 ( Under Commercial Division Rule 9, consenting parties can accelerate the adjudication of their disputes... the parties in this case have not consented to an accelerated adjudication under Rule 9 ) (emphasis added). Without this requisite consent, Rule 9 simply may not be applied. Plaintiffs next suggest that Rule 9 should nonetheless be applied because, as they allege, this action is well-suited to resolution under the Commercial Division s contemplated timeline for accelerated adjudications... because it concerns important rights that will simply be lost if this action is not adjudicated quickly. See Motion, p. 1. This contention should also be rejected. First, that this case is purportedly well suited for accelerated adjudication in no manner substitutes for the requisite consent that is admittedly lacking here. Second, any purported delay is clearly due to Helga Arminak, Armin Arminak and their affiliates, not Defendants. As noted, Plaintiffs only belatedly filed this action two months after Rieke-Arminak and AA filed the First New York Case, only brought their present Motion several weeks after this case was commenced, and only took any action at all years after the agreements containing the restrictive covenants at issue were executed; any purported delay is thus Plaintiffs own doing. Plaintiffs suggestion that Defendants strategy will be to delay this case (Motion, p. 1) is fabricated. In fact, Defendants have proceeded expeditiously and intend to answer the Complaint in this matter and respond to this Motion within the statutory time limits, without seeking any extensions of time. Further, Defendants have sought an extension of time to file the complaint in the First 9 12 of 13

13 New York Action strictly to enable the courts to determine the proper forum for these disputes not, as Plaintiffs suggest, as a purported means for delay. Third, Plaintiffs have not demonstrated any rights that purportedly would be lost or any other purported exigency or alleged irreparable harm supporting any need for accelerated proceedings. The restrictive covenants at issue have been in place since 2012, and were extended in 2014; Plaintiffs only first seek to challenge them now, several years later. See Compl., Index No /2016, NYSCEF Doc. No. 2, 42, 48-50, 71, 75. There is no sudden emergency. Finally, if there was in fact an exigency, Plaintiffs could seek a preliminary injunction yet they have declined to do so. Plaintiffs instead improperly seek de facto preliminary injunctive relief by means of this Motion for Accelerated Adjudication. In sum, Plaintiffs present Motion for Accelerated Adjudication is nothing more than another attempt by Plaintiffs to pursue baseless litigation. Plaintiffs latest abuse of the courts by means of this Motion should be summarily rejected. CONCLUSION For all the foregoing reasons, Plaintiffs Motion for Accelerated Adjudication should be denied in its entirety. Dated May 3, 2016 New York, New York REED SMITH LLP By/s/ Steven Cooper Steven Cooper Melissa Rubenstein Danielle Marlow Ian Turetsky 599 Lexington Avenue New York, New York Tel. (212) Fax. (212) Attorneys for Defendants of 13