FILED: NEW YORK COUNTY CLERK 12/22/ :37 PM INDEX NO /2014 NYSCEF DOC. NO. 318 RECEIVED NYSCEF: 12/22/2017 DEFENDANTS EXHIBIT B.

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1 EFENANTS EXHIBIT B 1 of 17

2 18 MEMORANUM OF LAW IN SUPPORT OF PLAINTIFFS MOTION TO STRIKE EFENANTS MOTION TO ISMISS THE COMPLAINT, ATE JUNE 3, 2014 [18 33] FILE: NEW YORK COUNTY CLERK 06/03/2014 INEX NO /2014 NYSCEF OC. NO. 37 RECEIVE NYSCEF: 06/03/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK EVUNP HOLINGS LLC, EVURTI LLC, EVE LLC, and ELI VERSCHLEISER, v. Plaintiffs, Index No.: /2014 I.A.S. Part: 3 Hon. Eileen Bransten Motion Seq.: 004 JACOB FRYMAN, JFURTI LLC, SUMMER INVESTORS LLC, and WINTER 866 UN LLC, efendants. MEMORANUM OF LAW IN SUPPORT OF PLAINTIFFS MOTION TO STRIKE EFENANTS MOTION TO ISMISS THE COMPLAINT 2 of 17

3 19 TABLE OF CONTENTS Page PRELIMINARY STATEMENT... 1 FACTS... 2 A. First Motion: efendants File an Oversize Brief Without Obtaining the Court s Permission... 2 B. Second Motion: efendants Tamper with Their Brief s Formatting to Circumvent the Court s Page Limits... 3 C. Third Motion: efendants Third Motion Still Violates the Court s Rules... 4 ARGUMENT... 6 I. The Court Should Strike efendants Motion To ismiss Because It Is Replete With isputed Facts That Are Not Properly Before This Court On A Motion To ismiss II. The Court Should Strike efendants Motion To ismiss Because efendants Violated the Court s Rules Regarding Page Limits for the Third Time III. efendants Motion to ismiss Should be Struck with Prejudice IV. The Court Should Extend Plaintiffs Time to Respond to efendants Motion Until Thirty ays After the Resolution of This Motion CONCLUSION i 3 of 17

4 20 TABLE OF AUTHORITIES Page Cases elgrange v. Madison Immobilier, LLC, /2013, 2013 WL (Sup. Ct. N.Y. County October 18, 2013)... 9 Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314 (2002)... 6 JFK Hotel Owner, LLC v. Hilton Hotels Corp., /2013, 2014 WL (Sup. Ct. N.Y. County, March 14, 2014)... 7 Leon v. Martinez, 84 N.Y.2d 83 (1994) Northeast Sort & Fulfillment Corp. v. Reader's igest Ass'n, Inc., No /1996, 2000 WL (Sup. Ct. Westchester County, September 13, 2000) Tsimerman v. Janoff, 40 A..3d 242 (1st ep't 2007)... 6 U.S. Fire Ins. Co. v. N. Shore Risk Mgmt., 114 A..3d 408 (1st ep't 2014)... 9 ii 4 of 17

5 21 PRELIMINARY STATEMENT This is a motion to strike efendants Motion to ismiss, filed on May 29, 2014 on the grounds that: 1. The motion incorporates 418 pages of extrinsic, unnecessary and prejudicial exhibits and affidavits containing disputed factual materials which are not properly placed before the Court on a motion to dismiss. 2. The arguments in efendants brief are inextricably interwoven with the improperly included facts such that it is impossible to consider the motion without considering the improper factual material; and 3. efendants have again violated the Court s May 6, 2014 order and Commercial ivision rules regarding page limits by supplementing their brief with a 65-page affidavit in support of their motion from which they quote extensively. This is the third Motion to ismiss efendants have filed in this action. Their prior two motions also violated the Court s rules on, inter alia, page limits, font size, line-spacing, and footnote font-size, and were withdrawn after Plaintiffs notified the Court of efendants violations. In light of these repeated violations, Plaintiffs respectfully request that the Court strike efendants third Motion to ismiss, with prejudice. efendants have intentionally violated the Court s rules three times, and they should not be given an unprecedented fourth opportunity to file a motion to dismiss, especially because efendants time to answer has lapsed more than ten-days ago. 1 5 of 17

6 22 Finally, Plaintiffs seek to extend the time to oppose efendants Motion to ismiss until thirty days after the Court rules on the instant Motion to Strike. FACTS A. First Motion: efendants File an Oversize Brief Without Obtaining the Court s Permission On April 30, 2014, efendants filed a letter with the Court requesting to modestly exceed the page limits provided for in Local Rule 14 (b). See Letter from aniel Edelman to Judge [sic] Bransten, ECF No. 2 (Apr. 30, 2014), attached as Ex. A to the Kadosh Affidavit. On the same day, Plaintiffs opposed this request on the grounds that efendants did not specify the length of the extension they were seeking, did not provide any justification for the page extension, and incorrectly cited to Local Rule 14, which provides for a 30-page limit, as opposed to the applicable Commercial ivision rule, Rule 17, which only allows 25 pages for a brief. See Letter from Samuel Kadosh to Justice Bransten, ECF No. 3 (Apr. 30, 2014), attached as Exhibit B to the Kadosh Affidavit. The next day, without awaiting any guidance from this Court, efendants filed a 45 page brief in support of their Motion to ismiss, and an additional 418 pages of affidavits and exhibits in support of their motion. See ECF Nos (May 1, 2014). On May 6, 2014, the Court denied efendants request for a page-limit extension, and informed efendants that the Court would not read beyond page twenty-five of their brief or supporting affidavits. See from 2 6 of 17

7 23 Andrew Cali-Vasquez to Steven Cooper et. al, attached as Exhibit C to the Kadosh Affidavit (the May 6 th Order ). Alternatively, the Court allowed efendants to re-file their brief and affidavits in a way that complied with the Court s page-limits. B. Second Motion: efendants Tamper with Their Brief s Formatting to Circumvent the Court s Page Limits On May 19, 2014, efendants filed their second Memorandum of Law in Support of Their Motion to ismiss. ECF No. 30. In their letter accompanying the motion, efendants explained that they were withdrawing their original motion, and re-filing a memorandum that complies with the [page-limits of] Rule 17. See Letter from aniel Edelman to Judge [sic] Bransten, ECF No. 31 (May 19, 2014) attached as Exhibit to the Kadosh Affidavit. Although efendants represented that they had submitted a brief that complied with the twenty-five page limit, efendants in fact submitted a 38 page brief (although with only twenty-five numbered pages) by formatting their brief with a smaller font-size, margin size, line-spacing and footnote font size than allowed by Commercial ivision Rule No. 6. This was a deliberate attempt by efendants to circumvent the Court s denial of their request for a page extension. The following day, Plaintiffs wrote to the Court to object, once again, to efendants violations. See Letter from Samuel Kadosh to Justice Bransten, ECF No. 32 (May 20, 2014) attached as Exhibit E to the Kadosh Affidavit. 3 7 of 17

8 24 On May 28, 2014, the parties jointly called the Court, and the Court instructed efendants that it would not accept a brief that did not conform with the Commercial ivision rules. efendants admitted that their second brief did not comply with the Commercial ivision s rules, but justified their conduct by stating that their second brief was shorter than their first brief. C. Third Motion: efendants Third Motion Still Violates the Court s Rules On May 29, 2014, efendants filed their third motion to dismiss. ECF No. 34. efendants did not file new exhibits or affidavits with this motion, but instead relied on those filed with their original motion to dismiss. See Letter from aniel Edelman to Justice Bransten, ECF No. 35 (May 29, 2014) attached as Exhibit F to the Kadosh Affidavit. Although efendants were given three opportunities to file a motion to dismiss that conformed with the Court s rules, they still refuse to do so. First, efendants wrongfully accompanied their motion to dismiss with twenty-one (21) exhibits and affidavits, comprising over 418 pages of extrinsic material. These exhibits and affidavits introduce new and contested facts, and are improperly placed before the Court on a motion to dismiss, which, with limited exceptions not relevant here, must accept as true the facts alleged in a plaintiff s complaint. efendants brief is inextricably interwoven with citations to these new and improper facts, thereby rendering any consideration of the brief absent these facts impossible. 4 8 of 17

9 25 Second, in its May 6 th order, the Court ruled that efendants may either resubmit a memorandum/brief and affirmation/affidavit that complies with Rule 17, or, if efendants choose to rely on the currently filed versions of efendants' memorandum and affidavit in support, the Court will not read beyond page 25 in each of those documents when deciding the motion to dismiss. Kadosh Aff., Ex. C (emphasis supplied). This order is consistent with Commercial ivision Rule No. 17 which mandates that affidavits and affirmations shall be limited to 25 pages each. efendants violated this Rule and the Court s express order by supplementing their brief with the Affidavit of Jacob Frydman, which is sixty-five pages long. See Affidavit of Jacob Frydman, ECF No. 8 (May 1, 2014). Mr. Frydman s affidavit is referred to extensively throughout efendants brief, and is the fulcrum of the arguments advanced in their brief. 1 The present motion to strike followed. 1 These are not the only instances where efendants have disregarded the Court s rules. In a hearing before the Court on April 29, 2014 in a related action, JFURTI v. Verschleiser, / 2014, Frydman attempted to introduce evidence for the first time, after deliberately withholding it from Plaintiffs, and telling Plaintiffs to go look up the information on the internet. The Court rebuked Frydman, stating that the glib answer, "Look it up on the Internet" is not good enough and refusing to consider Frydman s improper evidence. See May 29, 2014 Tr. 11:4-7; of 17

10 26 ARGUMENT I. The Court Should Strike efendants Motion To ismiss Because It Is Replete With isputed Facts That Are Not Properly Before This Court On A Motion To ismiss. A. Improper Affidavits: Exhibits B,, I, U In support of their Motion to ismiss, efendants have attached twenty-one exhibits and affidavits totaling over 418 pages of extrinsic evidence and and disputed facts. These exhibits include four affidavits from efendants or its employees totaling over seventy pages of new and contested testimony. See efendants Ex. B (Frydman Aff.); Ex. (Funt Aff.); Ex. I (Constantinescu Aff.); Ex. U (Loparrino Aff.) efendants brief is replete with references to these affidavits, and the arguments in their brief are inextricably intertwined with this disputed evidence. Because such disputed evidence is inadmissible on a motion to dismiss, efendants motion must be stricken. A party moving to dismiss may only rely on (i) documents that are appended to, or incorporated by reference in, the complaint, (ii) matters about which the Court may take judicial notice or (iii) documentary evidence that utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law. Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326 (2002). Affidavits do not qualify as documentary evidence for purposes of a motion to dismiss. Tsimerman v. Janoff, 40 A..3d 242, 242 (1st ep t 2007) (affidavits that did no more than assert the inaccuracy of 6 10 of 17

11 27 plaintiffs' allegations, may not be considered, in the context of a motion to dismiss ); JFK Hotel Owner, LLC v. Hilton Hotels Corp., /2013, 2014 WL , at *12 (Sup. Ct. N.Y. County, March 14, 2014) (Bransten, J.) (holding that defendant s affidavits may not be considered on a motion to dismiss). Nearly every page of efendants brief includes these improper factual assertions, making it impossible to consider efendants arguments independent of these facts which cannot be considered on a motion to dismiss. For example, efendants respond to Plaintiffs breach of contract claim by asserting that efendants did not breach the contract. See generally efendants Motion to ismiss ( efs. Mot. ) at Further, efendants claim that Plaintiffs cannot show performance under the contract and that Mr. Verschleiser s blatant and repeated breaches of the Separation Agreement began immediately after signing the Agreement. Id. at 19. These facts were not taken from Plaintiffs Complaint, but from Mr. Frydman s affidavit, and thus cannot be considered on a motion to dismiss. See Frydman Aff Similarly, efendants argue that they did not breach the contract by failing to make the required distributions under the contract because the holding companies have not made any distributions since ecember 3, efs. Mot. at 20. The source for this disputed fact is the affidavit of Mr. Loparrino, efendants employee. See efs. Ex. U of 17

12 28 Another example of efendants improper use of affidavits to introduce contested facts is in their response to Plaintiffs request for a declaratory judgment. efendants contend that there is no justiciable controversy regarding the ownership of United 866 Management because neither Frydman, nor any of the Frydman Parties make any claim to own [Plaintiffs ] interest in United 866 Management LLC. efs. Mot at efendants statements are based on Paragraphs of Mr. Frydman s affidavit. efendants have again premised their motion to dismiss on the self-serving affidavit submitted by the principal efendant, which is wholly improper. A final (but by no means exhaustive) example of efendants use of newly-introduced contested facts is in their response to Plaintiffs fraudulent inducement claim. The first cause of action in the Complaint asserts that efendant Jacob Frydman and Plaintiffs attorney, Martin Bell, fraudulently induced Plaintiffs to enter into the Sale and Purchase Agreement. In response, efendants claim that Martin Bell represented the parties jointly, and not Plaintiffs individually, and that Plaintiffs were represented by counsel in Chicago. See efs. Mot efendants source for these facts are the affidavit of efendant Jacob Frydman and efendants employee Barry Funt; these allegations are at odds with the allegations in the Complaint. These affidavits, which consist of nothing more than efendants view of the facts, cannot be considered on a motion to dismiss, and therefore, efendants motion, which is premised on these facts, must be stricken of 17

13 29 B. Improper s: Exhibits M, N, O, P, Q, R, S efendants also submitted seven exhibits of s, including s authored by Mr. Frydman, in support of their motion to dismiss. Like affidavits, s are not documentary evidence, and therefore, cannot be considered on a motion to dismiss. See U.S. Fire Ins. Co. v. N. Shore Risk Mgmt., 114 A..3d 408, 408 (1 st ep t 2014) ( s do not qualify as documentary evidence for purposes of a motion to dismiss); elgrange v. Madison Immobilier, LLC, /2013, 2013 WL , at *1 (Sup. Ct. N.Y. County October 18, 2013) (same). efendants rely on these improper exhibits throughout their motion. For example, efendants argue that they did not breach the provision of the sale agreement requiring them to retain Ms. Slamovitz because Ms. Slamovitz voluntarily quit her job with the Company. efs. Mot. at 23. efendants evidence that Ms. Slamovitz quit, and was not terminated are two self-serving s authored by Mr. Frydman. See efs. Exs. N-O. These exhibits, among other things, cannot be considered because they are devoid of context. We do not know whether Ms. Slamovitz received these s, or replied to them, contesting their assertions. They cannot be considered on a motion to dismiss. In sum, efendants motion should be struck because, as efendants concede, on a motion to dismiss, the facts alleged in the complaint [are] accepted as true, and the plaintiffs accorded the benefit of every possible 9 13 of 17

14 30 favorable inference. efs. Mot. at 8 citing Leon v. Martinez, 84 N.Y.2d 83, (1994). The motion is judged by such a standard because the parties have not had the benefit of discovery. Permitting this motion to go forward would waste the time and resources of the Plaintiffs, and the Court. II. The Court Should Strike efendants Motion To ismiss Because efendants Violated the Court s Rules Regarding Page Limits for the Third Time Rule 17 of the Commercial ivision of the Supreme Court, requires that affidavits and affirmations shall be limited to 25 pages each. The Court confirmed that this rule applies to the present case in its May 6 th order, stating that efendants may either resubmit a memorandum/brief and affirmation/affidavit that complies with Rule 17, or, if efendants choose to rely on the currently filed versions of efendants' memorandum and affidavit in support, the Court will not read beyond page 25 in each of those documents when deciding the motion to dismiss. Kadosh Aff., Ex. C (emphasis supplied). efendants violated this Rule and the Court s express order by supplementing their brief with the Affidavit of Jacob Frydman, which is sixty-five pages long. See Affidavit of Jacob Frydman, ECF No. 8 (May 1, 2014). This oversized affidavit is cited to, or provides the facts for statements on almost every page of efendants brief, and cannot be separated out from the brief of 17

15 31 The page limits were enacted to ensure that there are sufficient judicial resources available, not just to the parties in a single case, but to all litigants who come before it. Northeast Sort & Fulfillment Corp. v. Reader's igest Ass'n, Inc., No /1996, 2000 WL (Sup. Ct. Westchester County, September 13, 2000). efendants disregard for the page limits forces the Court and Plaintiffs to expend additional time and resources reviewing and responding to their motion. This is the third time efendants have willfully flouted the Court s Rules concerning page limits, and therefore, their Motion to ismiss should be struck. Id. (refusing to consider the parties briefs that were in excess of the page limits, including an 83-page affidavit). III. efendants Motion to ismiss Should be Struck with Prejudice efendants have serially violated the Court s rules regarding page limits, font sizes, line-spacing, margin size and footnote font-size. When the Court denied their request for an extension, they misleadingly tampered with their brief s formatting to fit 38 pages of text on to 25 pages. They have now filed a third Motion to ismiss which still violates the rules by introducing hundreds of pages of contested factual material, and an oversize affidavit in support of their motion. efendants should not be given endless opportunities to file a motion that violate the Rules, and Plaintiffs therefore request that efendants Motion to ismiss be struck with prejudice of 17

16 32 IV. The Court Should Extend Plaintiffs Time to Respond to efendants Motion Until Thirty ays After the Resolution of This Motion Plaintiffs opposition papers to the Motion to ismiss are due on June 9, On May 29, 2014, Plaintiffs asked efendants for an extension of time to respond to the motion to dismiss. efendants refused, and suggested that we go ask the court for an extension. Plaintiffs request that, given the current motion to strike, the Court extend Plaintiffs time to oppose efendants motion to dismiss until thirty days after that the Court rules on the current motion. Such a stay is in the interest of judicial economy in that it is inefficient to fully brief a motion which may be struck or significantly revised. CONCLUSION Plaintiffs respectfully request that the Court strike efendants Motion to ismiss with prejudice. Plaintiffs further request that its time to respond to efendants Motion to ismiss be extended until thirty days after the resolution of this motion of 17

17 33 ated: June 3, 2014 New York, New York REE SMITH LLP By: _Steven Cooper Steven Cooper Samuel Kadosh 599 Lexington Avenue New York, New York Tel: (212) Fax: (212) Attorneys for Plaintiffs EVUNP Holdings LLC, EVURTI LLC, EVE LLC, and Eli Verschleiser of 17

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