AKF Inc. v Hog Wild Gulf Shores, LLC

2024 NY Slip Op 32851(U)

August 13, 2024

Supreme Court, New York County

Docket Number: Index No. 656005/2023

Judge: Shahabuddeen Abid Ally

Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York

State and local government sources, including the New

York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official

publication.
NYSCEF DOC. NO. 34 

INDEX NO. 656005/2023 

RECEIVED NYSCEF: 08/13/2024 

SUPREME COURT OF THE STATE OF NEW YORK 

NEW YORK COUNTY 

PRESENT: HON. SHAHABUDDEEN ABID ALLY 

Justice 

PART 16TR 

AKF INC. d/b/a FUNDKITE, 

Petitioner, 

INDEX NO. 

MOTION DATES 

656005/2023 

6/18/2024 

7/11/2024 

-against- MOTION SEQ. NO. 001 & 002 

HOG WILD GULF SHORES, LLC d/b/a HOG WILD 

BEACH & BBQ/HOG WILD BBQ, THURMAN JAMES 

ALLEN, and ALLEN WATERSPORTS, LLC, 

DECISION & ORDER 

Respondents. 

The following e-filed documents, listed by NYSCEF document number, were read 

on this motion (Seq. No. 1) to/for ARTICLE 75 (INJUNCTION IN AID OF 

ARBITRATION): 1-10, 12, 14-20 

The following e-filed documents, listed by NYSCEF document number, were read 

on this motion (Seq. No. 2) to/for ARTICLE 75 (CONFIRM AWARD): 21-32 

This is a proceeding pursuant to CPLR §§ 7502(c) and 7510. 1 Petitioner first moved by Order to Show Cause ("OSC"), filed on December 1, 2023, for a preliminary injunction in aid of 

arbitration, pursuant to CPLR § 7502( c), to restrain respondents' bank accounts pending an award 

in an underlying arbitration proceeding, which was initiated on December 22, 2023, shortly after 

the Court signed the OSC. Now that the final arbitration award has been issued, petitioner moves 

by Notice of Motion, dated June 6, 2024, for an order, pursuant to CPLR § 7510, confirming the 

award in petitioner's favor. Respondents have neither appeared in this proceeding nor filed opposition to the motions. Both motions are consolidated herein for purposes of disposition. For the 

reasons set forth below, petitioner's motion seeking confirmation of the award (Seq. No. 2) is 

GRANTED, and petitioner's motion seeking a preliminary injunction in aid of arbitration (Seq. 

No. 1) is DENIED. 

1 In the Notice of Motion, petitioner states that the motion is pursuant to CPLR § 3215. But § 3215 concerns the 

entry of default judgment, not the confirmation of an arbitration award. Because petitioner's papers clearly seek confirmation of an arbitration award and apply the correct standards, however, the Court deems the motion as one made 

pursuant to CPLR § 7510. 

656005/2023 AKF Inc. d/b/a/ Fundkite v. Hog Wild Gulf Shores, LLC et al. 

Mot. Seq. Nos. 1 & 2 

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NYSCEF DOC. NO. 34 

INDEX NO. 656005/2023 

RECEIVED NYSCEF: 08/13/2024 

In a written Revenue Purchase Agreement, dated August 22, 2023 (the "RPA"), the parties 

agreed to enter into a nonrecourse cash advance transaction whereby respondent HOG WILD 

GULF SHORES, LLC d/b/a HOG WILD BEACH & BBQ/HOG WILD BBQ ("Hog Wild") agreed 

to sell $156,100 of its future receipts to petitioner in exchange for an upfront lump-sum payment 

of $111,500 less fees and costs. (NYSCEF Doc. 2) The other respondents are guarantors on the 

RPA. (See id.) The RPA contains a provision providing for arbitration of disputes with Mediation 

and Civil Arbitration, Inc. ("MCA") or JAMS. (Id. 'I[ 4.14) 

The RPA provides for a daily "delivery" amount of $929.17 from Hog Wild's receipts via 

an automatic debit from its designated bank, with a monthly reconciliation. 2 The designated bank 

account is held with Regions Bank. 

Petitioner alleges that, beginning on November 13, 2023, Hog Wild' s scheduled daily debit 

of receipts from Regions Bank was declined because the bank had stopped payment. Petitioner 

further asserts that Hog Wild did not inform petitioner whether the bank account had been closed 

or otherwise attempt to demonstrate any supposed downturn in the amount of Hog Wild' s daily 

receipts, as would have been permitted under the RPA. Petitioner alleges generally that "there is 

no reason for a merchant to refuse to deliver their share of Receipts or block Fundkite' s access to 

the Designated Account, unless the Merchant has no intention of complying with the RPA," and 

that "it has been Fundkite's experience that merchants who refuse to deliver their share of Receipts attempt to avoid collection by removing all funds from the Designated Account." (NYSCEF 

Doc. 1, 'I['I[ 36, 38) 

Petitioner commenced this proceeding on December 1, 2023. By signing the initiatory 

OSC, the Court temporarily restrained Regions Bank from transferring money out of any of respondents' bank accounts that were maintained with it. Petitioner thereafter properly served respondents in accordance with the method to which they consented in the RPA. 

On December 22, 2023, petitioner filed a Demand for Arbitration with MCA seeking 

$155,937.12, inclusive of interest, attorney's fees, and costs. (NYSCEF Docs. 16-17) On April 24, 

2 In the Verified Petition, petitioner states that the debit schedule was weekly, but the RPA clearly states that it is 

daily. (NYSCEF Doc. 2 at 2-3 ("SELLER has elected to have BUYER debit the Initial Estimated Delivery Amount Daily, 

therefore SELLER shall deliver Receipts each weekday, Monday and Friday.")) 

656005/2023 AKF Inc. d/b/a/ Fundkite v. Hog Wild Gulf Shores, LLC et al. 

Mot. Seq. Nos. 1 & 2 

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NYSCEF DOC. NO. 34 

INDEX NO. 656005/2023 

RECEIVED NYSCEF: 08/13/2024 

2024, the MCA arbitrator issued a Final Arbitration Award in petitioner's favor in the amount of 

$128,164.70, inclusive of costs. (NYSCEF Doc. 30) 

CPLR § 7510 provides that a court shall confirm an arbitration award upon application of 

a party made within one year following the award unless the award is vacated or modified in 

accordance with CPLR § 7511. Confirmation shall be summarily granted unless vacatur or modification is raised by a party or petitioner's application is untimely. Bernstein Family Ltd. P'ship v. 

Sovereign Partners L.P., 66 A.D.3d 1 (1st Dep' t 2009). 

Here, petitioner's application is timely and was properly served upon respondents pursuant to the method agreed upon in the RPA. The award has not been vacated or modified, and 

the time in which respondents may move to do so has expired. See CPLR § 7511(a) ("An application to vacate or modify an award may be made by a party within ninety days after its delivery 

to him."). Respondents have neither appeared in this proceeding nor opposed petitioner's application. Therefore, the Court confirms the Final Arbitration Award and directs that judgment be 

entered in petitioner's favor upon the award. 

As for petitioner's application for equitable injunctive relief, CPLR § 7502(c) provides, in 

relevant part: 

The supreme court ... may entertain an application ... for a preliminary 

injunction in connection with an arbitration that is pending or that is to be 

commenced inside or outside this state ... but only upon the ground that 

the award to which the applicant may be entitled may be rendered ineffectual without such provisional relief. The provisions of article 62 and 63 

of this chapter shall apply to this application .... 

To be entitled to an injunction under§ 7502(c), the First Department requires both a showing that 

the arbitration award could be rendered ineffectual as well as a showing of satisfaction of the 

three elements for injunctive relief pursuant to CPLR § 6301, namely, (1) likelihood of success on 

the merits, (2) irreparable injury in the absence of the injunction, and (3) a balance of equities in 

favor of the moving party. Patrolmen's Benevolent Ass'n of the City of N. Y., Inc. v. City of N. Y., 112 

A.D.3d 116, 118 (1st Dep't 2013); see also, e.g., Conlon Holdings LLC v. Chanos & Company LP, No. 

154908/2024, 2024 WL 3659592, at *3 (N.Y. Sup. Ct. N.Y. Cty. Aug. 1, 2024); AKF, Inc. v. Windows 

& Beyond Interiors, LLC, No. 653110/2023, 2023 WL 8570844, at *2 (N.Y. Sup. Ct. N.Y. Cty. Dec. 11, 

2023) [hereinafter AKF I]; accord Winter v. Brown, 49 A.D.3d 526, 529 (2d Dep't 2008) ("A party 

656005/2023 AKF Inc. d/b/a/ Fundkite v. Hog Wild Gulf Shores, LLC et al. 

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NYSCEF DOC. NO. 34 

INDEX NO. 656005/2023 

RECEIVED NYSCEF: 08/13/2024 

seeking relief under[§ 7502(c)] must also make a showing of the traditional equitable criteria for 

the granting of temporary relief under CPLR article 63."). 

Initially, petitioner's application is rendered moot by the issuance of the Final Arbitration 

Award. See AKF, Inc. v. SLK Song, LLC, No. 654980/2023, 2024 WL 2420140, at *1 (N.Y. Sup. Ct. 

N.Y. Cty. May 17, 2024) [hereinafter AKF II] ("Since the arbitration has been completed, and AKF 

has obtained all of the relief that it sought therein, there is no longer a basis for granting relief in 

aid of the arbitration, and the petition must be denied as academic."). CPLR § 7502( c) expressly 

allows a court to issue a preliminary injunction in aid of an arbitration "that is pending or that is 

to be commenced." Further, petitioner's Verified Petition itself sought a preliminary injunction 

"pending the resolution of the parties' arbitration." (Dkt. No. 1, 1[ 1 & p. 10) The subject arbitration 

is no longer "pending" because a final award has been issued. 

Even if the Court has authority under CPLR § 7502(c) to issue a preliminary injunction 

after the subject arbitration has concluded, petitioner fails to demonstrate any irreparable injury. 

Petitioner alleges nothing more than monetary damages. It does not allege or establish that the 

money that it seeks is "part of any specific res or fund which could rightly be regarded as the 

'subject of the action."' Int? Legal Consulting Ltd. v. Malabu Oil & Gas Ltd., 35 Misc. 3d 1203(A), at 

*9 (N.Y. Sup. Ct. N.Y. Cty. Mar. 15, 2012) (quoting Winter, 49 A.D.3d at 529)). Nor does it allege or 

establish that respondents have no other assets that could be seized or levied upon to satisfy a 

judgment. It is well settled that damages that are fully compensable by monetary relief, as petitioner's damages are here, do not constitute irreparable harm and are insufficient to support the 

granting of injunctive relief. Credit Agricole Indosuez v. Rossiyskiy Kredit Bank, 94 N.Y.2d 541, 544-

46 (2000); Kazantzis v. Cascade Funding RMl Acquisitions Grantor Trust, 217 A.D.3d 410, 412 (1st 

Dep't 2023); Noyack Med. Partners, LLC v. OSK IX, LLC, 206 A.D.3d 429,430 (1st Dep't 2022); Conlon 

Holdings, 2024 WL 3659592, at *6; AKF I, 2023 WL 8570844, at *2. Petitioner" simply seeks to ensure 

that an arbitration award in its favor would be recoverable, which is not an adequate basis for 

prejudgment equitable relief." AKF I, 2023 WL 8570844, at *2 (citing Credit Agricole, 94 N.Y.2d at 

548). 

The cases on which petitioner relies are distinguishable. H.I.G. Capital Management, Inc. v. 

Li gator, 233 A.D.2d 270 (1st Dep't 1996), and County Natwest Securities Corp. USA v. Jesup, Josephthal 

& Co., Inc., 180 A.D.2d 468 (1st Dep't 1992), both pre-date Patrolmen's Benevolent Association, 112 

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NYSCEF DOC. NO. 34 

INDEX NO. 656005/2023 

RECEIVED NYSCEF: 08/13/2024 

A.D.3d 116, and Winter, 49 A.D.3d 526, in which the First and Second Departments, respectively, 

required a petitioner under§ 7502(c) to also demonstrate the three elements for injunctive relief 

pursuant to CPLR § 6301. Qwil PBC v. Landow, 180 A.D.3d 593 (1st Dep't 2020), is distinguishable 

on factual grounds and has been so distinguished in the same context by multiple other trial 

courts. E.g., AKF Inc. v. Wagers Trailer Sales, Inc., No. 651522/2024, 2024 WL 2175499, at* 1 (N.Y. 

Sup. Ct. N.Y. Cty. May 10, 2024); AKF Inc. v. OBI Bus., L.L.C., No. 656339/2023, 2024 WL 1162764, 

at *1 (N.Y. Sup. Ct. N.Y. Cty. Mar. 12, 2024); AKF, Inc. v. Mgmt. & Org. Support Servs., LLC, No. 

652737/2023, at *1 (N.Y. Sup. Ct. N.Y. Cty. June 30, 2023). Finally, the numerous signed OSCs from 

other proceedings in which trial courts granted temporary restraining orders do not indicate 

whether those courts ultimately granted preliminary injunctive relief and on what grounds and 

thus are not persuasive. 

A preliminary injunction in aid of arbitration should not be granted here for the additional 

reason that petitioner has failed establish that this Court has jurisdiction over respondents' bank 

accounts. See AKF I, 2023 WL 8570844, at *2 ( declining to attach respondent bank accounts because 

petitioner did not establish that respondents maintained accounts at a branch located within New 

York); AKF II, 2024 WL 2420140, at *1 ("In any event, the granting of a preliminary injunction 

would have been improper ... [because] the court lacked jurisdiction over the out-of-state banks 

that AKF sought to restrain."). Here, petitioner's submissions demonstrate that all of the parties 

are Alabama residents. Further, the OSC demonstrates that Regions Bank was to be served in 

Alabama. None of petitioner's submissions demonstrates that Regions Bank conducts any relevant business in New York or that respondents maintain bank accounts at a New York branch of 

Regions Bank, or that respondents maintain accounts at any other banking institutions over 

which this Court could exercise jurisdiction. 

Accordingly, it is hereby: 

ORDERED and ADJUDGED that Motion Sequence 2 is GRANTED, and the Final Arbitration Award, dated April 24, 2024 (NYSCEF Doc. 30), issued in petitioner's favor in MCA Claim 

No. 45411/2023 is CONFIRMED; and it is further 

ORDERED that the Clerk of the Court shall enter judgment in favor of petitioner upon 

said Final Arbitration Award in the amount of $128,164.70 plus interest at 9% per annum commencing from April 24, 2024, plus costs and disbursements; and it is further 

656005/2023 AKF Inc. d/b/a/ Fundkite v. Hog Wild Gulf Shores, LLC et al. 

Mot. Seq. Nos. 1 & 2 

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NYSCEF DOC. NO. 34 

INDEX NO. 656005/2023 

RECEIVED NYSCEF: 08/13/2024 

ORDERED AND ADJUDGED that the Verified Petition and Motion Sequence 1, by 

which petitioner sought a preliminary injunction in aid of arbitration, are DENIED; and it is further 

ORDERED that the temporary restraining order set forth in the signed OSC, dated December 12, 2023, and entered on December 13, 2023, is VACATED and DISSOLVED; and it is 

further 

ORDERED that petitioner shall serve a copy of this Decision and Order upon respondents, Regions Bank, and the Clerk of the General Clerk's Office with notice of entry within twenty 

(20) days thereof; and it is further 

ORDERED that service upon the Clerk of Court shall be made in accordance with the 

procedures set forth in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases (Revised August 15, 2019);3 and it is further 

ORDERED that any requested relief not expressly addressed herein has been considered 

and is denied; and it is further 

ORDERED that the Clerk shall mark Motion Sequences 1 and 2 decided in all court records; and it is further 

ORDERED that the Clerk shall mark this proceeding disposed in all court records. 

This constitutes the decision and order of the Court. 

August 13, 2024 

DATE 

CHECK ONE: 

MOTION SEQ 1: 

MOTIONSEQ2 

CHECK IF APPROPRIATE: 

X CASE DISPOSED 

GRANTED 

X GRANTED 

SETTLE ORDER 

0 DENIED 

□ DENIED 

INCLUDES TRANSFER/REASSIGN 

SHAHAl1 ABI:1::.C 

NON-FINAL DISPOSITION 

GRANTED IN PART 

GRANTED IN PART 

SUBMIT ORDER 

FIDUCIARY APPOINTMENT 

OTHER 

OTHER 

STAY CASE 

REFERENCE 

3 The protocols are available at https://www.nycourts.gov/LegacyPDFS/courts/ljd/supctmanh/Efil-protocol.pdf. 

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