Opinion
831 CA 19-02290
11-13-2020
In the Matter of John L. YEHLE, Petitioner-appellant, v. Jon T. RICH, Jr., Respondent-respondent.
SLYE LAW OFFICES, P.C., WATERTOWN (ROBERT J. SLYE OF COUNSEL), FOR PETITIONER-APPELLANT. COSTELLO, COONEY & FEARON, PLLC, SYRACUSE (DANIEL R. ROSE OF COUNSEL), FOR RESPONDENT-RESPONDENT.
SLYE LAW OFFICES, P.C., WATERTOWN (ROBERT J. SLYE OF COUNSEL), FOR PETITIONER-APPELLANT.
COSTELLO, COONEY & FEARON, PLLC, SYRACUSE (DANIEL R. ROSE OF COUNSEL), FOR RESPONDENT-RESPONDENT.
PRESENT: PERADOTTO, J.P., CARNI, LINDLEY, CURRAN, AND BANNISTER, JJ.
MEMORANDUM AND ORDER
Appeal from an order of the Supreme Court, Jefferson County ( James P. McClusky, J.), entered June 6, 2019 in a proceeding pursuant to Limited Liability Company Law § 702. The order, among other things, denied petitioner's cross motion to vacate a stipulated order.
It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.
Memorandum: Petitioner and respondent formed Wellesley Island Storage, LLC (WIS) to construct and operate rental storage units, and each held a 50% interest in WIS. After financial disputes arose between them, petitioner commenced this proceeding seeking judicial dissolution of WIS, the sale of its property, and an accounting. Respondent did not oppose dissolution and sought an order directing the sale of WIS's assets.
Following some amount of discovery, a stipulated order was entered pursuant to which the parties agreed, among other things, that WIS should be dissolved and all of its assets sold at auction. In the stipulated order, the parties agreed that "additional discovery relating to the accounting and distribution of assets [was] still outstanding" and that "further proceedings and claims remain[ed] to determine each member's contribution and membership interests."
Despite the provisions of the stipulated order, petitioner refused to execute the documents necessary to proceed with the sale of the assets at auction "until [respondent] produce[d] the financial" documents petitioner had requested. Respondent thereafter moved for the appointment of a receiver to proceed with the auction, and petitioner cross-moved for an order vacating the stipulated order. Supreme Court granted the motion in part by directing the sale of the assets at auction and denied the cross motion. Petitioner appeals.
We conclude that the court properly denied the cross motion. "As with a contract, courts should not disturb a valid stipulation absent a showing of good cause such as fraud, collusion, mistake or duress ...; or unless the agreement is unconscionable ... or contrary to public policy ...; or unless it suggests an ambiguity indicating that the words did not fully and accurately represent the parties’ agreement" ( McCoy v. Feinman , 99 N.Y.2d 295, 302, 755 N.Y.S.2d 693, 785 N.E.2d 714 [2002] ; see Hallock v. State of New York , 64 N.Y.2d 224, 230, 485 N.Y.S.2d 510, 474 N.E.2d 1178 [1984] ). The party seeking to vacate a stipulation bears the burden of proof, and "[u]nsubstantiated or conclusory allegations are insufficient" ( Pieter v. Polin , 148 A.D.3d 1191, 1192, 50 N.Y.S.3d 498 [2d Dept. 2017] ; see Hallock , 64 N.Y.2d at 230, 485 N.Y.S.2d 510, 474 N.E.2d 1178 ).
Here, petitioner contends that the stipulated order should be vacated on grounds of fraud, unilateral mistake and unconscionability. We disagree. Contrary to petitioner's contention, he failed to establish that any misrepresentation was made that would support claims of fraud or unilateral mistake (see Lama Holding Co. v. Smith Barney , 88 N.Y.2d 413, 421, 646 N.Y.S.2d 76, 668 N.E.2d 1370 [1996] ; Mooney v. Manhattan Occupational, Physical & Speech Therapies, PLLC , 166 A.D.3d 957, 960, 89 N.Y.S.3d 707 [2d Dept. 2018] ). Rather, he alleged that respondent's claims related to the amount respondent purportedly contributed to WIS could not be verified. Petitioner also failed to establish any justifiable reliance on respondent's claims inasmuch as the stipulated order specifically provides that further discovery and proceedings were required to determine the parties’ contribution amounts (see Cervera v. Bressler , 126 A.D.3d 924, 926, 6 N.Y.S.3d 278 [2d Dept. 2015] ).
We reject petitioner's further contention that it would be unjust or inequitable to enforce the stipulated order, i.e., that the order is unconscionable, inasmuch as petitioner "failed to establish that the terms of the [stipulated order] were so unfair or one-sided as to ‘shock the conscience and confound the judgment of any person of common sense’ " ( Amerally v. Liberty King Produce, Inc. , 170 A.D.3d 637, 638, 95 N.Y.S.3d 338 [2d Dept. 2019] ; see Chang v. Chang , 237 A.D.2d 235, 235, 655 N.Y.S.2d 22 [1st Dept. 1997] ).
Having failed to show the existence of any ground sufficient to invalidate a contract, petitioner is not entitled to vacatur of the stipulated order (see Hallock , 64 N.Y.2d at 230, 485 N.Y.S.2d 510, 474 N.E.2d 1178 ).