Summary
observing "a special proceeding is treated like a summary judgment motion"
Summary of this case from Griffon Loring LLC. v. Amethyst Alt Asset Fund 2016 LLC.Opinion
6616 Index 150344/13
09-25-2018
In re NORTHWEST 5TH & 45TH REALTY CORP., Petitioner–Respondent, v. MITCHELL, MAXWELL & JACKSON, INC., et al., Respondents–Appellants, Jeffrey Jackson, etc., et al., Respondents.
Shaw & Binder P.C., New York (Stuart F. Shaw, New York and Daniel S. Lopresti of counsel), for appellants. Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., New York (Paul N. Gruber of counsel, New York), for respondent.
Shaw & Binder P.C., New York (Stuart F. Shaw, New York and Daniel S. Lopresti of counsel), for appellants.
Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., New York (Paul N. Gruber of counsel, New York), for respondent.
Tom, J.P., Mazzarelli, Andrias, Kern, JJ.
Judgment, Supreme Court, New York County (Anil C. Singh, J.), entered October 31, 2016, in petitioner's favor against respondent Steven Knobel in the amount of $661,526.64, unanimously reversed, on the law, with costs, the judgment vacated, and respondents' cross motion to dismiss the petition granted. The Clerk is directed to enter an amended judgment dismissing the proceeding.
In this special proceeding, petitioner seeks to enforce, against Knobel, two judgments that it obtained against respondent Mitchell, Maxwell & Jackson, Inc. (MMJ) in a plenary action. The petition invoked Debtor and Creditor Law § 273, which requires insolvency. The petition also quoted Debtor and Creditor Law § 271(1), which states, "A person is insolvent when the present fair salable value of his assets is less than the amount that will be required to pay his probable liability on his existing debts as they become absolute and matured." Despite this, the petition made no allegations about the fair salable value of MMJ's assets; thus, it failed to make a prima facie case (see Kenyon & Kenyon LLP v. SightSound Tech., LLC , 151 A.D.3d 530, 531, 58 N.Y.S.3d 298 [1st Dept. 2017] ).
Because a special proceeding is treated like a summary judgment motion (see CPLR 409[b] ; Matter of Port of N.Y. Auth. [62 Cortlandt St. Realty Co.], 18 N.Y.2d 250, 255, 273 N.Y.S.2d 337, 219 N.E.2d 797 [1966], cert denied sub nom. McInnes v. Port of N.Y. Auth. , 385 U.S. 1006, 87 S.Ct. 712, 17 L.Ed.2d 544 [1967] ), petitioner could not cure the deficiency of proof in its petition in reply (see Henry v. Peguero, 72 A.D.3d 600, 602, 900 N.Y.S.2d 49 [1st Dept. 2010], appeal dismissed 15 N.Y.3d 820, 908 N.Y.S.2d 152, 934 N.E.2d 886 [2010] ).
In addition to alleging fraudulent conveyance, the petition sought to pierce MMJ's corporate veil to hold Knobel (MMJ's 50% shareholder) liable for the judgment against MMJ. Such veil-piercing was neither factually nor legally justified in this case (see e.g. 210 E. 86th St. Corp. v. Grasso , 305 A.D.2d 156, 758 N.Y.S.2d 654 [1st Dept. 2003] ).
The Decision and Order of this Court entered herein on May 17, 2018 is hereby recalled and vacated (see M–3641, 2018 WL 4571994 decided simultaneously herewith).