FILED: NEW YORK COUNTY CLERK 08/21/ :29 PM INDEX NO /2010 NYSCEF DOC. NO. 225 RECEIVED NYSCEF: 08/21/2018
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1 COUNTY OF NEW YORK X LIA JOSEPH, Index No against- Plaintiff, (Gammerman, JHO) NOTICE OF APPEAL DENIS M. JOSEPH. AUTOMOTIVE REALTY PARTNERS, LLC, NORTHMARQ CAPITAL, LLC, AND SUN LIFE, Defendants X PLEASE TAKE NOTICE that Plaintiff Lia Joseph, by undersigned counsel, hereby appeals to the Supreme Court of the State of New York, Appellate Division, First Department, from the attached Order of this Court, dated and entered in the office of the Clerk of New York County on July 24, Appeal is taken from each and every part of the Order, as well as from the whole Order. Dated: New York, New York August 21, 2018 Bryan A. McKenna 590 Madison Avenue New York, NY (917) bam@mckennalegal.nyc Floor Attorney for Plaintiff Lia Joseph 1 of 8
2 LLC, AND SUN LIFE, Defendants. COUNTY OF NEW YORK X LIA JOSEPH, Index No Plaintiff, -against- PRE-ARGUMENT DENIS M. JOSEPH. AUTOMOTIVE REALTY STATEMENT PARTNERS, LLC, NORTHMARQ CAPITAL, X Pursuant to Rule 5531 of the New York Civil Practice Law and Rules and Section of the Rules of the Appellate Division, First Department, Plaintiff-Appellants Daniel W. Dienst and Jill C. Dienst hereby provide the following Pre-Argument Statement: 1. Title of Action: The title of the action is set forth in the caption above. 2. Full Names of the Original Parties: The full names of the original parties are set forth in the caption above, except that Northmarq Capital, LLC, and Sun Life are no longer parties to the action. 3. Name, Address and Telephone Number of Counsel for Appellants: Bryan A. McKenna 590 Madison Avenue - 18th FlOOr New York, NY (917) bam@mckennalegal.nyc 4. Name, Address and Telephone Number of Counsel for Respondents: Arthur Russell 661 Franklin Avenue Nutley, NJ (973) (973) arthur@attorneyrussell.com 2 2 of 8
3 5. Court and County From which the Appeal is Taken: Supreme Court, County of New York (Gammerman, JHO) 6. Ap_peal is from: An order entered July 24, 2018 (the "Order"), made by the Ira Gammerman, J.H.O., which analyzed and awarded certain damages to plaintiff. 7. Nature and Object of the Action: This is an action to recover damages arising out of the Defendant-Respondent's fraud, breach of fiduciary duty, conversion of corporate (LLC) funds regarding a business jointly owned by plaintiff. Defendant-Respondent caused the company to distribute funds to himself when such distributions should have been divided pro-rata. Plaintiff-Appellants' damages in this action exceed $1,000, Result Reached in the Court Below: By the Order, the court below awarded Plaintiff-Appellant damages of less than $10,000, finding that no damages should be awarded Plaintiff-Appellant because the debts owed by the company would render any enumeration an academic exercise and because Plaintiff-Appellant sued only individually and not also derivatively. 9. Grounds for Seeking Reversal: J.H.O. Gammerman erred because: (a) at the time the Defendant-Respondent made the distributions, the Company did not yet have the debts that it later accrued and the distributions should rightly have gone to both membersprorata; and (b) Plaintiff-Appellantiff filed an Amended Complaint which asserted derivative causes of action, which plaintiff moved to dismiss and which J.H.O. Gammerman belayed ruling upon until the outcome of an action which determined if funds were available. Thus, the Amended Complaint the validity of which is technically sub judice was the basis of J.H.O. Gammerman determining that no damages would be awarded. The Court should have awarded Plaintiff-Appellant not less than $1,593,056. Moreover, J.H.O. Gammerman also failed to account for certain sale proceeds of the business, the proceeds of which Defendant-Respondent had the company issue solely to Defendant-Respondent as a distribution solely to Defendant-Respondent, which rightly should have been divided pro rata and accounts for an additional $1,300, owed to Plaintiff-Appellant. 3 3 of 8
4 Acecrdingly, the trial court should be õrdered to award Plaintiff-Appellant damages in an amount consistent with Plaintiff-Appellant's pro rata membership interest in the LLC, an amount in excess of $2,500, Information on Related Action/Proceeding: None. 11. Information on Additional Pending Anneal: None. Dated: New York, New York August 21, 2018 Bryan A. McKenna 590 Madison Avenue New York, NY (917) Floor Attorney for Plaintiff Lia Joseph 4 4 of 8
5 COUNTY OF NEW YORK X LIA JOSEPH, Index No against- Plaintiff, (Gammerman JHO.) NOTICE OF ENTRY DENIS M. JOSEPH. AUTOMOTIVE REALTY PARTNERS, LLC, NORTHMARQ CAPITAL, LLC, AND SUN LIFE, Defendants. X PLEASE TAKE NOTICE that the attached is a true copy of a Decision and Order Of the Hon. Ira Gammennan, JHO, that was duly entered in the office of the Clerk of the County of New York on July 24, Dated: New York, New York August 21, 2018 Bryan A. McKenna 590 Madison Avenue New York, NY (917) bam@mekennalegal.nyc Floor Attorney for Plaintiff Lia Joseph 5 of 8
6 NEW YORK COUNTY HON. IRA GAMMERMAN, J.H.O. Justice PART Index Number : /201Ó AUTOMOTIVE REALTY PARTNERS, VS' LIA JOSEPH SEQ UENCE NUMBER : 013 DISMISS... - INDEX NO. MOTION DATE MOTION SEQ. NO. The fe: Gwiiig papers, r,üiiibered 1 to _, were read on this motion to/for Notice of MeSer!O der to Show Cause - Affidavits - Exhibits No(s). Answering Affidavits - Exhibits..._ No(s). Replying Affidavits No(s). Upon the ferge!ng papers, it is ordered that this motion is Dated:, J.S.C. HON. IRA GAMMERMAN, J.H. 1. CHECK ONE:... ÃSE DISPOSED O NON-FINAL DISPOSITION 2. CHECK AS ArenvrRIATE:... MOTION IS: GRANTED C DENIED D GRANTED IN PART O OTHER 3. CHECK IF APPROPRIATE: SETTLE ORDER O SUBMIT ORDER DO NOT POST C FIDUCIARY APPOINTMENT O REFERENCE 6 of 8....
7 COUNTY OF NEW YORK: IAS PART 27 - _ X LIA JOSEPH, Plaintiff - against - DENIS JOSEPH, AUTOMOTIVE REALTY PARTNERS, LLC, and FLATBUSH AVENUE COMMONS, LLC Defendants. Index No /2010 DECISION and ORDER _ - _ _ _.._.... _- - -X IRA GAMMERMAN, J.H.O.: This matter was tried before me on June 25 and June 27, Familiarity with the underlying facts in this case is presumed.. Suffice it to say that any case in which a mother is suing her son and that son has countersued his mother has a complicated and tortured history and this matter, which has been pending before me since 2010, is no exception. At issue now is whether defendant Denis Joseph, because he was the one running the parties' car wash business, took money that he should not have taken and therefore there was a profit that he should have shared with plaintiff Lia Joseph. Ms. Joseph contends that Mr. Joseph took at least $2,896,465 as "distributions" from the car wash business they owned together and that as 55% owner of Automotive Realty Partners LLC ("Automotive"), the entity that controlledthebusiness, she is entitled to $1,593,056 of that amount. Shesubmits the expert report of Alan Blass, C.P.A., in support of this position. Mr. Joseph, in tum,argues that Automotive had no profits and, therefore, Ms. Joseph is entitled to nothing. A judgment of foreclosure was entered against Automotive in March of 2016 in Supreme Court, Kings County. Atthattime, Automotive owed its lender $5,329, The property was sold for $1,610,000, leaving a deficiency of $3,719, of 8
8 Even if I were to accept Ms. Joseph's theory of the case, it is clear that the money she claims she is entitled to would have to go toward satisfying the nearly $4 million deficiency and not to Ms. Joseph directly. Ms. Joseph, howeyer, is not entitled to any such amount because she brought this action as a direct action when to recover money wrongfully taken from the LLC it should have been brought as a derivative action, Abrams v Donati, 66 NY2d 951 (1985). The only money to which Ms. Joseph is entitled here is $8,100.20, which Mr. Joseph concedes is her share of business profits from 2008, the one year that Automotive was profitable. In that year, Automotive had net profits of $25, Under the Car Wash Agreement, Denis Joseph was to get a management fee of 20% or $ and 90% of the remaining profits were to be paid 45% each to Denis and Lia Joseph, P/f Ex. 1. At this time, Ms. Joseph had not yet acquired the remaining 10% of the business from her daughter Vivian, Ptf Ex. 2. Accordingly, based on the foregoing, it is now ADJUDGED that plaintiff Lia Joseph, residing at, do recover of defendant Denis Joseph, residing at, the sum of $8,100, together with costs and disbursement as taxed by the Clerk in the sums of and, respectively, making in all the sum of, and that the plaintiff have execution therefor. Date: ENTER: J.H:O. HON. IRA GAMMERMAN, J.H.O. 2 8 of 8
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