SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF QUEENS Commercial Division I.A.S. Part 4 MICHAEL SHIVDAT AND ZEN HIBACHI Hon. Marguerite Grays, J.S.C. LOUNGE CORP., Index No. 700700/2013 Plaintiffs, Action #1 against TREVOR RUPNARAIN, MALA RUPNARAIN, RAVI RAMOUTAR, ACCESS ENTERPRISES, INC. AND KARIBWORKS ENTERPRISES, INC. Defendants. I.A.S. Part 4 BABITA R. SHIVDAT AND ZEN HIBACHI Hon. Marguerite Grays, J.S.C. LOUNGE CORP., Index No. 704198/2014 Plaintiffs, Action #2 against DHYANA HIBACHI LOUNGE, INC., TREVOR RUPNARAIN, MALA RUPNARAIN, RAVI RAMOUTAR, and ACCESS ENTERPRISES, INC., Defendants. AFFIDAVIT OF COUNSEL IN SUPPORT OF AND TO SUPPLEMENT PRETRIAL MEMORANDUM PER COMM. DIV. RULE 31(a) OR OPENING STATEMENT ON BEHALF OF DEFENDANTCOUNTERLAIM PLAINTIFF RAVI R. RAMOUTAR STAMELL & SCHAGER, LLP Richard J. Schager, Jr. 260 Madison Ave., 16d' Floor New York, NY 100162404 Attorneys for Defendant New York, New York Counterclaim Plaintiff August 20, 2018 Ravi R. Ramoutar 1 of 6
RICHARD J. SCHAGER, JR., an attorney admitted to practice in the Courts of the State of New York, affirms as follows: 1. This affirmation is submitted to supplement the PreTrial Memorandum dated May 29, 2018, submitted on behalf of DefendantCounterclaim Plaintiff Ravi R. Ramoutar ("Ramoutar") under Commercial Division Rule 31(a). If the Court determines that no pretrial memorandum is required in this case, this affirmation will be read with the May 29 Memorandum as defendant Ramoutar's opening statement. 2. This affirmation addresses four subjects, (A) the Shivdats breach of fiduciary duty by signing a Stipulation of Discontinuance that traded off the corporate claim of Zen Hibachi for their personal benefit; (B) the Shivdats' apparently deceiving Zen's corporate counsel into aiding their breach, and his statement that he would withdraw the Stipulation unless the claims against defendant Rupnarain were not settled; (C) the requirement that Zen's corporate counsel niove for permission to withdraw after having appeared in the action; and (D) the parties refusal to participate with efforts under Comm. Div. Rules 26, 28, 30 & 31 of defendant Ramoutar's counsel to prepare for trial. (A) The Purported Stipulation of Discontinuance 3. The principal development since the conference before the Court on May 29 is that plaintiffs Michael and Babita Raquel Shivdat (the "Shivdat Plaintiffs") and Zen Hibachi Lounge Corp. ("Zen Hibachi"), the plaintiffs in these two Actions, and defendants Trevor and Mala Rupnarain (the "Rupnarain Defendants"), together with the two companies they control, defendants Access Enterprises, Inc. and Karibworks Enterprises, Inc., filed a purported Stipulation of Discontinuance, dated as of August 1, 2018, but signed on behalf of the Shivdat 2 of 6
Plaintiffs and Zen Hibachi Lounge Corp. on August 13, 2018. Defendant Ramoutar learned of the Stipulation on Tuesday, August 14, 2018. 4. At no time have the details of the settlement been disclosed to defendant Ramoutar. At no time has any proposal been made to him to settle his claims, and at no time have the Shivdat Plaintiffs described the settlement as achieving any benefit for Zen Hibachi. 5. Five facts stand out at this stage of the case: a. Zen Hibachi has three shareholders, Ramoutar, Rupnarain and the Shivdat Family. b. After June 1, 2012, defendant Ramoutar was the only one of the three shareholders to invest any money in Zen Hibachi. His investment was over $400,000. c. The space in which the Zen Hibachi club was to operate is equipped with a buildout at cost estimated at $1,000,000. That buildout is now owned by the Rupnarain Defendants, either directly or through their whollyowned corporation, defendant Access Enterprises, Inc. d. The Court issued three carefullyreasoned decisions denying defendant claims.1 Rupnarain's Motions to Dismiss, that the holding Zen Hibachi claims were valid e. Defendant Ramoutar has been completely excluded from the settlement discussions between the Shivdat Plaintiffs (purporting to act also on behalf of Zen Hibachi) and the Rupnarain Defendants (acting also on behalf of Access and Karibworks). 6. With no benefit achieved for Zen Hibachi, what has happened here is a classic case of breach of fiduciary duty by a corporate director and principal officer: (i) The Shivdat Plaintiffs and the Rupnarain Defendants have worked out a settlement by dividing up Defendant Ramoutar's capital contributions between them, and (ii) the Shivdat Plaintiffs have traded off Zen Hibachi corporate claims in exchange for a personal benefit. 1 Action #1, Order of August 12, 2015, EF Doc. 522; Action #1, Order of December 9, 2015, EF Doc 526; and Action #2, (second) Order of December 9, 2015, EF Doc 209. 2 3 of 6
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way relating to the merits," and accordingly constitutes an appearance for the Shivdat Plaintiffs and Zen Hibachi. Siegel & Conners, New York Practice 112 (2018). This appearance is doubly true with the Stipulation being signed on behalf of the corporation Zen Hibachi, which can only appear through counsel. CPLR 321(a). Attorney Musso was advised of today's hearing, and if the Shivdat Plaintiffs argue today that he is not retained for this litigation, they essentially are arguing that they have discharged him, and they must be advised that attorney Musso must submit a motion to withdraw under CPLR 321(b)(2). (D) The Parties' Refusal to Participate in Trial Preparation 1 1. Regarding the organization of the trial, the undersigned as defendant Ramoutar's counsel made proposals to identify matters not in contention, to resolve disputed questions, and to prepare an order of witnesses, all under Commercial Division Rule 30(b). We provided the Court with an estimate of the length of the trial under Rule 26. We proposed to confer on exhibits to be offered without objection under Rule 28. 12. Further, we made these proposals (i) to Plaintiffs prior counsel Cox Padmore before they ran off, (ii) to the Shivdat Plaintiffs individually when they were pro se, and (iii) to attomey Musso as their new counsel. None responded. 13. We also made these proposals to counsel for Trevor Rupnarain and his wife Mala and the corporate defendants. Apparently anticipated that they would be able to get the Shivdats to sell out the Zen Hibachi corporate claims for individual benefits, they never bothered to respond. 4 5 of 6
14. All I can say to the Court is that I tried. Dated: August 20, 2018 New York, New York Richard. Sch r, Jr. STAMELL & SCHAGER, LLP 16th 260 Madison Ave., FlOOr New York, NY 100162404 Tel.: Fax: (212) 5664057 (212) 5664061 Email: schager(alssnylaw.com Attorneys for Defendant Counterclaim Ravi Ramoutar Plaintiff 5 6 of 6