FILED: KINGS COUNTY CLERK 12/12/ :27 PM INDEX NO /2014 NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 12/12/2014

Transcription

1 FILED KINGS COUNTY CLERK 12/12/ PM INDEX NO /2014 NYSCEF DOC. NO. 9 RECEIVED NYSCEF 12/12/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS X BEN BERMAN, individually, and as an officer, director and shareholder of ATLAS COATINGS GROUP CORP. by and in behalf of said corporation, as a shareholder of MERCURY PAINT CORPORATION, by and in behalf of said corporation, and as an officer, director and shareholder of DANBEN REALTY CORP., by and in behalf of said corporation, Plaintiff, - against - JEFF BERMAN, DANIEL BERMAN, ATLAS COATINGS GROUP CORP., MERCURY PAINT CORPORATION, DANBEN REALTY CORPORATION and 988 E. 49 th ST REALTY LLC, Defendants X Index No /2014 DEFENDANTS ANSWER TO COMPLAINT Defendants Jeff Berman, Daniel Berman, Atlas Coatings Group Corp., Mercury Paint Corporation, Danben Realty Corporation and 988 E. 49TH ST REALTY LLC (collectively, the Defendants ), by their counsel, Sullivan & Worcester LLP, answer Plaintiff Ben Berman s Complaint, as follows 1. Defendants lack knowledge or information sufficient to form a belief as to whether the allegations in paragraph 1 of the Complaint are true. ATLAS COATINGS GROUP CORP. 2. Defendants admit the allegations in paragraph 2 of the Complaint. 3. Defendants admit the allegations in paragraph 3 of the Complaint. 4. Defendants deny the allegations in paragraph 4 of the Complaint. 5. Defendants admit the allegations in paragraph 5 of the Complaint. 6. Defendants admit the allegations in paragraph 6 of the Complaint.

2 7. Defendants lack knowledge or information sufficient to form a belief as to whether the allegations in paragraph 7 of the Complaint are true, except admit that Jeff Berman manages the day-to-day operations of Atlas. MERCURY PAINT CORPORATION 8. Defendants admit the allegations in paragraph 8 of the Complaint. 9. Defendants admit the allegations in paragraph 9 of the Complaint. 10. Defendants admit the allegations in paragraph 10 of the Complaint. 11. Defendants admit the allegations in paragraph 11 of the Complaint. 12. Defendants admit the allegations in paragraph 12 of the Complaint. DANBEN REALTY CORP. 13. Defendants admit the allegations in paragraph 13 of the Complaint. 14. Defendants admit the allegations in paragraph 14 of the Complaint. 15. Defendants admit the allegations in paragraph 15 of the Complaint. 16. Defendants admit the allegations in paragraph 16 of the Complaint. 17. Defendants admit the allegations in paragraph 17 of the Complaint. 18. Defendants admit the allegations in paragraph 18 of the Complaint. 19. Defendants admit the allegations in paragraph 19 of the Complaint. BUSINESS OF ATLAS, MERCURY AND DANBEN 20. Defendants admit the allegations in paragraph 20 of the Complaint. 21. Defendants admit the allegations in paragraph 21 of the Complaint. 22. Defendants admit the allegations in paragraph 22 of the Complaint. 2

3 ANSWER TO THE FIRST CAUSE OF ACTION 23. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 22 of the Complaint. 24. Defendants admit the allegations in paragraph 24 of the Complaint. 25. Defendants admit the allegations in paragraph 25 of the Complaint. 26. Defendants deny the allegations in paragraph 26 of the Complaint. 27. Defendants deny the allegations in paragraph 27 of the Complaint. 28. Defendants deny the allegations in paragraph 28 of the Complaint. ANSWER TO THE SECOND CAUSE OF ACTION 29. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 28 of the Complaint. 30. Defendants admit the allegations in paragraph 30 of the Complaint. 31. Defendants admit the allegations in paragraph 31 of the Complaint. 32. Defendants deny the allegations in paragraph 32 of the Complaint. 33. Defendants deny the allegations in paragraph 33 of the Complaint. 34. Defendants deny the allegations in paragraph 34 of the Complaint. 35. Defendants deny the allegations in paragraph 35 of the Complaint. 36. Defendants deny the allegations in paragraph 36 of the Complaint. ANSWER TO THE THIRD CAUSE OF ACTION 37. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 36 of the Complaint. 38. Defendants admit the allegations in paragraph 38 of the Complaint. 39. Defendants deny the allegations in paragraph 39 of the Complaint. 3

4 40. Defendants deny the allegations in paragraph 40 of the Complaint. 41. Defendants deny the allegations in paragraph 41 of the Complaint. 42. Defendants deny the allegations in paragraph 42 of the Complaint. 43. Defendants deny the allegations in paragraph 43 of the Complaint. ANSWER TO THE FOURTH CAUSE OF ACTION 44. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 43 of the Complaint. 45. Defendants admit the allegations in paragraph 45 of the Complaint. 46. Defendants admit the allegations in paragraph 46 of the Complaint. 47. Defendants admit the allegations in paragraph 47 of the Complaint. 48. Defendants deny the allegations in paragraph 48 of the Complaint. 49. Defendants admit the allegations in paragraph 49 of the Complaint. 50. Defendants deny the allegations in paragraph 50 of the Complaint. 51. Defendants deny the allegations in paragraph 51 of the Complaint. ANSWER TO THE FIFTH CAUSE OF ACTION 52. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 51 of the Complaint. 53. Defendants deny the allegations in paragraph 53 of the Complaint, except admit that Atlas s gross purchase price for paint purchases from Mercury is based on a formula agreed to and practiced since Atlas s inception and which often results in Mercury supplying Atlas with inventory priced at the same price as Atlas sells to customers, but subject to a 15% fixed return to Atlas. 54. Defendants admit the allegations in paragraph 54 of the Complaint. 4

5 55. Defendants deny the allegations in paragraph 55 of the Complaint. 56. Defendants deny the allegations in paragraph 56 of the Complaint. 57. Defendants deny the allegations in paragraph 57 of the Complaint. 58. Defendants deny the allegations in paragraph 58 of the Complaint. 59. Defendants deny the allegations in paragraph 59 of the Complaint. 60. Defendants deny the allegations in paragraph 60 of the Complaint. 61. Defendants deny the allegations in paragraph 61 of the Complaint. 62. Defendants deny the allegations in paragraph 62 of the Complaint. ANSWER TO THE SIXTH CAUSE OF ACTION 63. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 62 of the Complaint. 64. Defendants admit the allegations in paragraph 64 of the Complaint. 65. Defendants deny the allegations in paragraph 65 of the Complaint. 66. Defendants deny the allegations in paragraph 66 of the Complaint. 67. Defendants deny the allegations in paragraph 67 of the Complaint. 68. Defendants deny the allegations in paragraph 68 of the Complaint. 69. Defendants deny the allegations in paragraph 69 of the Complaint. ANSWER TO THE SEVENTH CAUSE OF ACTION 70. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 69 of the Complaint. 71. Defendants deny the allegations in paragraph 71 of the Complaint, except admit that Atlas must value its inventory in connection with its obligations under the applicable tax laws and regulations. 5

6 72. Defendants deny the allegations in paragraph 72 of the Complaint. 73. Defendants deny the allegations in paragraph 73 of the Complaint. 74. Defendants deny the allegations in paragraph 74 of the Complaint. 75. Defendants deny the allegations in paragraph 75 of the Complaint. 76. Defendants deny the allegations in paragraph 76 of the Complaint. 77. Defendants deny the allegations in paragraph 77 of the Complaint. 78. Defendants deny the allegations in paragraph 78 of the Complaint. ANSWER TO THE EIGHTH CAUSE OF ACTION 79. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 78 of the Complaint. 80. Defendants deny the allegations in paragraph 80 of the Complaint except admit that Mercury s federal income taxes are prepared by a certified public accountant and that the Due from Affiliates entry on Mercury s balance sheet is, in the aggregate, as stated in subparagraphs (a), (b), and (c). 81. Defendants deny the allegations in paragraph 81 of the Complaint. 82. Defendants deny the allegations in paragraph 82 of the Complaint. 83. Defendants deny the allegations in paragraph 83 of the Complaint. 84. Defendants deny the allegations in paragraph 84 of the Complaint. 85. Defendants deny the allegations in paragraph 85 of the Complaint. ANSWER TO THE NINTH CAUSE OF ACTION 86. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 85 of the Complaint. 87. Defendants admit the allegations in paragraph 87 of the Complaint. 6

7 88. Defendants admit the allegations in paragraph 88 of the Complaint. 89. Defendants admit the allegations in paragraph 89 of the Complaint. 90. Defendants admit the allegations in paragraph 90 of the Complaint. 91. Defendants admit the allegations in paragraph 91 of the Complaint. 92. Defendants admit the allegations in paragraph 92 of the Complaint. 93. Defendants deny the allegations in paragraph 93 of the Complaint. 94. Defendants deny the allegations in paragraph 94 of the Complaint. 95. Defendants deny the allegations in paragraph 95 of the Complaint. ANSWER TO THE TENTH CAUSE OF ACTION 96. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 95 of the Complaint. 97. Defendants deny the allegations in paragraph 97 of the Complaint, except admit that the NYC Mayor s Office of Contract Services requires contract vendors to fill out Vendor Questionnaires and Principal Questionnaires. 98. Defendants deny the allegations in paragraph 98 of the Complaint, except admit that Ben Berman s signature is required on the form referenced in paragraph 97 above. 99. Defendants deny the allegations in paragraph 99 of the Complaint Defendants deny the allegations in paragraph 100 of the Complaint Defendants deny the allegations in paragraph 101 of the Complaint. ANSWER TO THE ELEVENTH CAUSE OF ACTION 102. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 101 of the Complaint Defendants deny the allegations in paragraph 103 of the Complaint. 7

8 104. Defendants deny the allegations in paragraph 104 of the Complaint Defendants deny the allegations in paragraph 105 of the Complaint Defendants deny the allegations in paragraph 106 of the Complaint Defendants deny the allegations in paragraph 107 of the Complaint Defendants deny the allegations in paragraph 108 of the Complaint Defendants deny the allegations in paragraph 109 of the Complaint Defendants deny the allegations in paragraph 110 of the Complaint Defendants deny the allegations in paragraph 111 of the Complaint, except admit that 988 E. 49TH ST REALTY LLC was originally formed under the name Pollack Paint & Field LLC Defendants deny the allegations in paragraph 112 of the Complaint, except admit that Mercury Paint does business as Pollack Paint & Field Defendants deny the allegations in paragraph 113 of the Complaint Defendants deny the allegations in paragraph 114 of the Complaint Defendants deny the allegations in paragraph 115 of the Complaint Defendants deny the allegations in paragraph 116 of the Complaint Defendants deny the allegations in paragraph 117 of the Complaint Defendants admit the allegations in paragraph 118 of the Complaint Defendants deny the allegations in paragraph 119 of the Complaint Defendants deny the allegations in paragraph 120 of the Complaint Defendants deny the allegations in paragraph 121 of the Complaint. 8

9 ANSWER TO THE TWELFTH CAUSE OF ACTION 122. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 121 of the Complaint Defendants admit the allegations in paragraph 123 of the Complaint Defendants deny the allegations in paragraph 124 of the Complaint, except admit that some sales are paid by customers with cash Defendants deny the allegations in paragraph 125 of the Complaint Defendants deny the allegations in paragraph 126 of the Complaint Defendants deny the allegations in paragraph 127 of the Complaint Defendants deny the allegations in paragraph 128 of the Complaint. ANSWER TO THE THIRTEENTH CAUSE OF ACTION 129. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 128 of the Complaint Defendants deny the allegations in paragraph 130 of the Complaint, except admit that Mercury must value its inventory in connection with its obligations under the applicable tax laws and regulations Defendants deny the allegations in paragraph 131 of the Complaint Defendants deny the allegations in paragraph 132 of the Complaint Defendants deny the allegations in paragraph 133 of the Complaint Defendants deny the allegations in paragraph 134 of the Complaint Defendants deny the allegations in paragraph 135 of the Complaint Defendants deny the allegations in paragraph 136 of the Complaint. 9

10 ANSWER TO THE FOURTEEN CAUSE OF ACTION 137. Defendants repeat and reallege their answers to the allegations in paragraphs 1 to 136 of the Complaint Defendants deny the allegations in paragraph 138 of the Complaint Defendants deny the allegations in paragraph 139 of the Complaint Defendants deny the allegations in paragraph 140 of the Complaint Defendants deny the allegations in paragraph 141 of the Complaint Defendants deny the allegations in paragraph 142 of the Complaint Defendants deny the allegations in paragraph 143 of the Complaint Defendants deny the allegations in paragraph 144 of the Complaint. FIRST AFFIRMATIVE DEFENSE Plaintiff s sixth cause of action is barred by the statute of limitation in that it pertains to an agreement regarding fixtures, which, by its terms, is not to be performed within one year from the making thereof. SECOND AFFIRMATIVE DEFENSE All of plaintiff s causes of action are barred or limited by the applicable statutes of limitation. THIRD AFFIRMATIVE DEFENSE Plaintiff s claims are barred by the equitable doctrine of unclean hands. By way of example, Plaintiff himself had legal authority with respect to the various entities that he now charges with misconduct and has himself signed documents, including his own personal tax returns, that incorporate the transactions that Plaintiff now challenges. 10

11 FOURTH AFFIRMATIVE DEFENSE Plaintiff by express or implied contract agreed to the transactions involving Danben Realty Corporation, Atlas Coatings Group Corp., and Mercury Paint Corporation. FIFTH AFFIRMATIVE DEFENSE Plaintiff is estopped from asserting the causes of action in that Plaintiff has been fully aware of the various alleged transactions and either acquiesced or ratified them through his actions and words. SIXTH AFFIRMATIVE DEFENSE Plaintiff fourth cause of action does not present a justiciable case or controversy and seeks an advisory opinion. SEVENTH AFFIRMATIVE DEFENSE To the extent that the due from Affiliates accounts are settled as between and among Mercury, Atlas and other entities, all amounts due from and to the various entities should be settled, including not only Mercury s right to recover the amounts Due from Affiliates alleged in paragraph 80 of the Complaint, of which $412, represents an initial loan from Mercury to Atlas, but also the $1,356, due from Atlas to Mercury (which is subject to adjustment), and Ben Berman, as a shareholder of Atlas should be ordered to take all steps necessary to authorize Atlas s repayment of all amounts due to Mercury. 11

12 WHEREFORE, Defendants demand judgment as follows (a) (b) That the Complaint of the Plaintiff be dismissed in its entirety; and Such other, further, and different relief as this court may deem just and proper. Dated New York, New York December 12, 2014 Yours, etc., /s/andrew T. Solomon Andrew T. Solomon SULLIVAN & WORCESTER LLP 1633 Broadway, 32nd Floor New York, New York (212) Attorneys for Defendants 12