Opinion
Index No. 508333/2022
09-19-2022
YOEL WEBER and YOEL LEONOROVITZ, Individually and derivatively on behalf of HORSEPOWER ELECTRIC AND MAINTENANCE CORP., Plaintiff, v. GARY BARNETT; HP STOCK LLC and EXTELL DEVELOPMENT COMPANY,· Defendants, GARY BARNETT, Third-Party Plaintiff, v. PASCACK GROUP LLC and PASCACK WL HOLDINGS LLC, Third-Party Defendants
Unpublished Opinion
DECISION AND ORDER
HON. LEON RUCHELSMAN, JUDGE
The Plaintiff/Third Party Defendants have moved; seeking to compel responses to; Notices to Admit served May 31, 2022, The defendant has opposed the motion. Papers have been submitted by the parties and arguments held. After reviewing the arguments of the parties this court now makes the following determination.
According to the Verified Complaint .Horsepower Electric and Maintenance Corp., i:s equally owned by plaintiffs "Yoel Weber, Yoel Leonorovitz and an; entity called HP Stock LLC pursuant to an operating agreement dated October 28, 2014. Gary Barnett is the managing member of HP Stock. Horsepower Electric is an electrical subcontractor in the construction industry. Pursuant to the Operating agreement Horsepower Electric was required to prioritize its work on behalf of defendant Extell Development Company, an entity owned by Barnett. The Verified Complaint alleges various wrongs committed by Bar net t in-eluding reducing the profits to which Horsepower Electric was entitled, failing to pay Horsepower Electric for work performed on Ex-tell projects and other acts and omissions-. The Verified Complaint alleges causes of action for breach of fiduciary duty, breach of contract, unjust enrichment, tortious, interference, quantum meruit and. attorney's fees. The defendant served an amended answer and raised various counterclaims. Regarding this motion the counterclaims allege that Horsepower Electric,; termed the Horsepower Joint Venture, "over time, acquired multiple parcels of land in Rockland County, New York, Village, of Chestnut Ridge ('Rockland County Properties')". Upon information and belief, the Rockland County Properties consist of dozens of acres; of mostly undeveloped land" (see,; Amended Verified Answer with Counterclaims, ¶ 204 [NYSCEF Doc.. #9]) . Further, the counterclaim alleges that "upon information and belief, Weber and Leonorovitz, in a wrongful effort to gain an unfair advantage and extract concessions from Barnett and limit their losses on Company projects, have embarked on a bad fad faith campaign to frustrate Barnett and appropriate for themselves the Rockland County Properties" (id. at ¶ 248). In Paragraph 251 the counterclaim asserts that during a meeting between Weber Leonorovitz and Barnett "neither Weber nor Leonorovitz denied that Barnett had a one third interest in the entities that owned the Rockland. County Properties. Instead,, to justify excluding Barnett front -.all further, interest in the Rockland County Properties, they argued that Bamett's failure to timely adhere to the formality of executing an. operating agreement reflecting Barnett's interest somehow rendered Barnett's interest unenforceable, and - incredibly - arguably forfeited" (id).
As noted on May 31, 2022 the plaintiff served notices to admit all involving the -counterclaim about the properties in Rockland County. Specifically, the notices to admit contain twenty-three individual paragraphs and all of them, with the exception of requests three through eight., deal With various aspects of the operating agreements, of the third party defendants and various provisions of suchagreements. The defendant has objected to such notices to admit on;the grounds they seek Ultimate issues in the case.
Conclusions of Law
It is well settled that a notice to. admit is a proper device to resolve matters of fact, about which there is no disagreement, in order to expedite matters for trial 132nd Avenue LLC v. Angelo Holding Corp., 134; A.D.3d 696, 20 N.Y.S.3d 420 [2d Dept., 2015]). However, a notice to admit may not be utilized for ultimate contested questions1 of fact (Burrell v. West, 163 A.D.3d 660, 81 N.Y.S.3d 433 [2d Dept., 2018]).
The third counterclaim asserts a cause of action for breach of fiduciary duty regarding the Rockland County properties. Paragraph 2 67 alleges that "as the managing co-venturers, Weber and. Leonorovitz owed a fiduciary duty to Barnett to hold his membership interest in the Horsepower Joint Venture, including Barnett's interest in and. to the .Rockland County Properties on behalf of. the venture, and Weber and Leonorovitz were not permitted to appropriate the opportunities and benefits incidental to the position they occupied as co-venturers in derogation of Barhett's rights": (id). Two paragraphs later the counterclaim provides: more specificity. It asserts that "Weber and Leonorovitz's conduct in, among other things: (i) usurping Barnett's ownership interest in the. Rockland County Properties:; (ii) creating documents to conceal Barnett's contributions to the Rockland County Properties; (iii) refusing to acknowledge Barnett's equity share of the: entities that own the Rockland County Properties.; (iv) refusing to turnover financial records or other records related to Barnett's equity Share, of the Rockland County Properties; and. (v) appropriating for themselves benefits and profits generally of the Horsepower Joint Venture in stark derogation of Barnett's rightful expectations as a partner in a common venture, constitute breaches of their fiduciary duties and duties of utmost good faith and loyalty" (see, Amended Verified Answer with Counterclaims, ¶ 269) . Thus, essentially, the counterclaim alleges the plaintiffs acted to eliminate Barrett's share from the Rockland County properties, The notices to admit seek to compel Barrett to admit that he has no share in the Rockland County properties.
A Careful review of the notices, to admit reveals, that requests one, two, nine and fifteen all concern the "true and accurate" operating agreements of Pascack Group LLC and Pascack WL Holdings LLC as well as the list, of members of each entity. However, there is no way the defendant could admit to such information since he has no way of knowing., since he is not a signatory, whether those documents are true and accurate. Requests three through eight seek an admission whether any joint venture exists between the plaintiffs and the defendant. However, it is well settled that a partnership or joint venture need, not be. in writing to be enforceable (see, Blank v, Nadler, 143 A.D.2d 966, 533 N.Y.S.2d 891 [2d Dept. .1988]). Moreover, the existence of an oral agreement is generally a question of fact (see, Martin v. Cohen, 17 Misc.3d 1116 (A), 851:N.Y.S.2d 64 [Supreme Court Suffolk County 2007]). Thus, these requests for admission are more than mere matters, about which there is no disagreement. Indeed, they concern the very crux of the counterclaim. The remainder of the requests seek admissions about operational provisions of the operating agreements and admissions that defendant Barnett did not take certain actions with respect to, those agreements. These matters are not matters that could not possibly: be. subject to any dispute but rather are vigorously contested.
These notices to admit seek to undermine Barrett's ability to pursue his counterclaim regarding the Rockland County properties,. That is art improper use of a notice to admit.
Therefore, based on the foregoing, the motion seeking to compel the defendant to respond to the notices to admit is denied
So ordered.