SHORT FORM ORDER SUPREME COURT-STATEOFNEW YORK Present: HON. RALPH P. FRANCO, -- -- e ------------ IJXtIE>l\TTERv: ~=-rhe~plicxtionof D_~~~LB.GOLDF~~pLj'RSU~iTTOCPLR93102 FOR_&--O~iRT~COh~ELTI=PRODUCTIOI\JOF ~~CL~~E~~SB~-P~~LIPGOLDF-~, MARC GOLDF_ARB S.Wl_-EL GOLDFARKKMOR o~~co~l~p_~~~~.l~c.~~orris HEIGHTSLLC, ~_.J&KTOTJ~RS W_-TH CO. LLC: ROCKAWAY OAT COMJJ_L\3-iJ_C, SHERID_%XOiuE COMPAiWLLC, soon_~_to~~~~lcoicip_~~-llc, COOPEEATI%E DE~ ELOPIIE1\;TC~~_~~ERE_~TYCOiLIP.~~LLC: NORTHO~~C@~B~~~LLC.RE~~TEOiu~ COMl'_Gi3- LLC. EE_%CH25".STREETCORP., GOLDFARBLAWfiC.: COXOLXSEOhFCOhLLPANY LLC.FIFTHA\E~~XDE\ELOP~~NTCO.LLC,CED~ TJVO CO~~_~~-~LC.DEEG_~~T~~-O COMPANYLLC, FORDH~fO~~C@SLP~~~-LLC.DR~O~E CO\fP_AXq-LLC._n-EBB Wi'~R\-IEV+- XSSOCIXTES LLC, WILSON JOXES PL_mS RE.~TYLLC.~~~ROCKCO~IP_~~YLLC.~~TE GOLDF.ARB AI C-EXE COMP_Al\i, IXET O~~CO~~_~YLLC.GOLDFARBHLrDSON~C., \LXlXA, EC.. P_ARKW_AY ASSOCIATES LLC.COD.LLCz.d PELIC_L\;'hL_1XAGEMENT NC., -- 1 I~Iotion by Petitioner for an Order pursuant to CPLR 3 102(c) for pre-litigation disclosure is denied. l Y Petitioner, Daniel B. Goldfarb seeks a voluminous document request prior to the commencement of litigation. Justice TRIALAAS, PART 16 NASSAU COUNTY INDEX No.: 0 11044/00 MOTION SEQ. NO: 1
2 The entities named as the Respondents in this action operate under the umbrella of Goldfarb Properties consisting of real estate entities started by Petitioner s father, Samuel Goldfarb, one of the Respondents and his uncles, David and Saul. (Saul is since deceased). In his Affidavit in Opposition, Respondent alleges that in the 1960 s, Samuel Goldfarb founded a real estate business in the metropolitan area with his brothers, Saul and David. Through their work, and with the later contributions of other family members, that business has prospered. The business is run with each piece of real estate held by an individual limited liability company (or corporation) created for that specific purpose. The members of the limited liability companies (or shareholders of the corporations) are Goldfarb family members or trusts created for their benefit. He further alleges that for a time during the 1990 s, he sought to bring Daniel into the family business. Many years earlier, he created trusts, with Daniel as the beneficiary, holding interests in a number of the real estate entities, hoping that Daniel, like his brother and cousins, eventually would earn those interests through his work in the business. Daniel s involvement
3 in the business, however, was short-lived and sporadic. Respondent alleges that Daniel left the business voluntarily after several years of substance abuse, legal, financial, and absenteeism problems. Despite repeated efforts by Respondent and his son, Marc to cover for Daniel s problems and to help him overcome them, ultimately, Petitioner chose to leave to pursue other employment and educational opportunities. He denies that Daniel was fired, and implores the Court that Daniel, if he wishes to return, even now, would be welcomed back by his family with open arms. Most interesting is Respondent s allegation that Symbolically, we have not changed the locks at our business premises, even though Daniel, who is suing us and has behaved erratically at times, continues to have his own set of keys. In-December, 1998, Daniel, then age 28, affected the transfer of the prior trust interests to an irrevocable grantor trust (the Trust ). As set forth in the accompanying affidavit of Daniel s brother, Marc who Daniel selected to be a trustee of the Trust, Daniel s only interest in any of the entities named as Respondents herein is as a
beneficiary of the Trust. Marc Goldfarb and his Father, in sworn 4 Affidavits, contend that Daniel has an annual six-figure income from the Trust, which is far more than the Trust requires and, last year, loaned him more than an additional $20,000 on top of that. Petitioner s Father, Samuel Goldfarb concludes his Affidavit with the following plea: My son is a troubled young man with great potential. As he knows, there is almost nothing I would not do for him. Indeed, through my hard work and the Trust that evolved from it. Daniel has a healthy income (as further liberally supplemented by me) and guaranteed financial security. I long for an end to our estrangement and to his making a constructive contribution, whether to our business or to another that is fortunate enough to have him. Daniel alleges that his cousin, Philip (David s son) and his brother, Marc fired him. Daniel then rejoined the companies and began working at a base salary of $100,000 per year. Daniel recently married and had a child. He requested additional compensation and was fired once again.
5 Annexed, as Exhibit A, is a copy of a letter dated June 9,2000, from Daniel s attorney of record to Respondent s attorney. It states inter alia: As you know, we have been retained by Daniel Goldfarb together with the Law Offices of Dominic A. Barbara, in connection with the possible buy-out, by your clients of Mr. Goldfarb s interest in various A various family trusts and interests. second letter dated June 27, 2000, (Exhibit B) requesting documents and records was not answered, resulting in this motion. The Respondents contend that various documents that Daniel is seeking have already been turned over and that he probably lost them. In Matter of Janosik, 71 A.D.2d 1058, the Court held that: [Pre-action disclosure under CPL 3 102 (subd [c] is not available to determine whether a cause of action in fact exists. The prime facie cause of action must be demonstrated (Siegel, Practice Commentaries, McKinney 's Cons Laws of NY, Book 7B, CPLR C3 102:4, p. 263). An examination to frame a complaint will not be permitted where what is sought is to ascertain whether facts supporting the cause of
action exist (Matter of Simpson [Traum] 63 AD2d 583; L-Tron Corn. v. Davco Systems, 60 AD2d 25). Similarly, such an examination is not permitted to explore the feasibility of framing a complaint, (Cotler v. Retail Credit Co. 18 AD2d 898). Once an applicant fairly demonstrates that a cause of action exists, CPLR 3 102 (subd [c] is available to him to determine the form that the action should take and even who the defendant should be. Petitioner s Affidavit states that Only through discovery of the relevant documents demonstrating my interests in the various entities and trusts, can the full extent and nature of mv claim be determined. (emphases added). (Par. 4). 6 I have absolutely no regard or what a fair value Finally he states a knowledge as to what my rights are in this for my interests would be. (Par. 11). proceeding such as this is proper and necessary to provide pre-action discovery of these specific documents so that the Precise nature and extent of the claims to be made bv me can be determined before a Court proceeding is commenced. (emphasis added). (Par. 17).
7 Although Petitioner perfunctorily states that he will seek the imposition of a constructive trust, an accounting and possibly dissolution of various companies of which either I or my grantor trust hold an ownership interest in. (Par. l), pre-litigation discovery is being sought herein not to frame a complaint, but rather, to determine the merits of his claim against his father, brother, uncle and cousin. The entitlement to disclosure to aid in the framing of a complaint must be predicated on a showing that the party seeking discovery has a meritorious cause of action. Gleich v. Kissinger, 111 A.D.2d 130. Pre-litigation discovery may not be utilized as a device to ascertain whether facts supporting a cause of action exists. Hoffman v. Batridde, 155 Misc.2d 862. In a similar vain, on a motion to dismiss a pleading for failure to state a cause of action pursuant to CPLR 32 11 (a), the pleading is to be liberally construed. All of the facts alleged are to be accepted as true and accorded the benefit of any possible favorable inference to
8 determine if they fit within a legal theory. See: Leon v. Martinez, 84 NY2d 83. Other than conclusory allegations set forth in his Affidavits, Petitioner has failed to set forth a cause of action with specificity that would warrant pre-action disclosure any degree of under CPLR 3 102(c). Petitioner s reliance on Cilone v. Wilson Safety Products, Inc., 229 A.D.2d 372, for the proposition that the rules governing discovery in this state are required to be liberally construed in favor of requiring disclosure upon any facts bearing on the controversy is not applicable to pre-action disclosure under CPLR 3 102(c), unless the Movant has set forth facts sufficient to state a cause of action. Should Petitioner desire to commence a plenary action, there is ample procedure pursuant to the Business Corporation Law and Limited Liability Company Law for a litigant with a viable cause of action to seek production of documents in the context of such a proceeding.
9 Since it appears from Bernard Goldfarb s Affidavit that he is most eager for a reconciliation with his son, Daniel Goldfarb, the parties might pursue other non-judicial alternatives before their respective positions and feelings are further polarized. This terminates all proceedings Dated: September 12,200O Hon. Ralph P. Franc0