### 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. SHAHABUDDEENABID 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, THURMANJAMES ALLEN, andALLEN 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 proceedingpursuantto CPLR 

### §§ 7502(c) and 7510. 1 Petitioner first movedby Order to Show Cause ("OSC"), filed on December 1, 2023, for a preliminary injunction in aid of arbitration, pursuantto CPLR 

### § 7502(c), to restrainrespondents' bankaccountspending an award in an underlying arbitration proceeding, which was initiated on December 22, 2023, shortly after theCourt signed theOSC. Now thatthefinal arbitration awardhasbeenissued, petitionermoves 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 oppositionto themotions. Bothmotions areconsolidatedhereinfor purposes ofdisposition. 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 defaultjudgment, 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 etal. Mot. Seq. Nos. 1 & 2 1 of 6 Page 1 of 6 

### [* 1]NYSCEF DOC. NO. 34 INDEX NO. 656005/2023 RECEIVED NYSCEF: 08/13/2024 

### In a writtenRevenuePurchaseAgreement, datedAugust 22, 2023 (the "RPA"), theparties 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 ofits future receipts to petitionerin exchange for an upfrontlump-sumpayment 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") orJAMS. (Id. 'I[ 

### 4.14) The RPA provides for a daily "delivery" amount of$929.17 from Hog Wild's receipts via anautomaticdebitfrom its designated bank, witha monthly reconciliation. 2

### Thedesignatedbank account is held with Regions Bank. Petitioner alleges that, beginningonNovember 13, 2023, HogWild's scheduled daily debit of receipts from Regions Bank was declined because the bank had stopped payment. Petitioner further asserts thatHogWild didnotinformpetitionerwhetherthebankaccounthadbeenclosed orotherwise attempt to demonstrate any supposed downturn inthe amountofHogWild's daily receipts, as wouldhavebeenpermitted under the RPA. Petitioner alleges generally that "there is no reason for a merchant to refuse to deliver their share ofReceipts orblock Fundkite's access to the Designated Account, unless the Merchant has no intention ofcomplying with the RPA," and that "it has been Fundkite's experience that merchants who refuse to deliver their share of Receipts attemptto avoidcollectionbyremovingallfunds from theDesignatedAccount." (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 themethod 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 thatthe debit schedule was weekly, but the RPA clearly states that it is daily. (NYSCEF Doc. 2 at 2-3 ("SELLER has elected to haveBUYER debit the Initial Estimated DeliveryAmount Daily, therefore SELLER shall deliverReceipts each weekday, Monday and Friday.")) 656005/2023 AKF Inc. d/b/a/ Fundkite v. HogWild Gulf Shores, LLC etal. Mot. Seq. Nos. 1 & 2 2 of 6 Page2 of6 

### [* 2]NYSCEF DOC. NO. 34 INDEX NO. 656005/2023 RECEIVED NYSCEF: 08/13/2024 2024, the MCA arbitrator issued a FinalArbitrationAward inpetitioner's favor in the amount of $128,164.70, inclusive of costs. (NYSCEF Doc. 30) CPLR § 7510 providesthat 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 shallbe summarily granted unless vacaturormodification 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 madeby a party within ninety days after its delivery to him."). Respondentshave neither appeared in this proceeding nor opposed petitioner's application. Therefore, the Court confirms the Final Arbitration Award and directs thatjudgment be entered inpetitioner's favor upon the award. As for petitioner's application for equitable injunctive relief, CPLR § 7502(c) provides, in relevantpart: The supreme court ... may entertain an application
... for a preliminary injunction inconnectionwith 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 suchprovisional relief. The provisions of article 62 and 63 of this chapter shall apply to this application
.... To be entitled to an injunctionunder§ 7502(c), theFirstDepartmentrequires both a showingthat the arbitration award could be rendered ineffectual as well as a showing of satisfaction of the three elements for injunctive reliefpursuantto 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 BenevolentAss'n ofthe City ofN. Y., Inc. v. City ofN.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. Mot. Seq. Nos. 1 & 2 3 of 6 Page 3 of 6 

### [* 3]NYSCEF DOC. NO. 34 INDEX NO. 656005/2023 RECEIVED NYSCEF: 08/13/2024 seeking reliefunder[§ 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 mootby the issuance of the FinalArbitration 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) [hereinafterAKFII] ("Since the arbitrationhas been completed, and AKF has obtained all of the reliefthat it soughttherein, 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 "pendingtheresolutionoftheparties' arbitration." (Dkt. No. 1, 1[ 1 & p. 10) The subjectarbitration is no longer "pending" because a final award hasbeen 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 at529)). 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 constituteirreparableharm and are insufficient to support the granting of injunctive relief. 

### CreditAgricole 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't2023);

### NoyackMed. Partners, LLCv. OSKIX, LLC, 206 A.D.3d 429,430 (1stDep't2022); 

### Conlon Holdings, 2024 WL 3659592, at*6;

### AKFI, 2023 WL 8570844, at*2. Petitioner"simply seeksto 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 

### CreditAgricole, 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 (1stDep'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 BenevolentAssociation, 112

656005/2023 AKF Inc. d/b/a/Fundkite v. HogWild Gulf Shores, LLC et al. Mot. Seq. Nos. 1 & 2 4 of 6 Page 4 of 6 

### [* 4]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, 180A.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);AKFInc. v. OBIBus., 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, thenumerous signedOSCsfrom 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 preliminaryinjunctionin aidof arbitrationshouldnotbegrantedhereforthe additional reason thatpetitionerhas failed establish that this Courthasjurisdiction over respondents' bank accounts. SeeAKFI, 2023 WL8570844, at *2 (decliningto attachrespondentbankaccountsbecause petitionerdidnotestablishthatrespondentsmaintained accounts ata branchlocated withinNew York); AKF II, 2024 WL 2420140, at *1 ("In any event, the granting of a preliminary injunction would have been improper
... [because] the court lackedjurisdiction overthe out-of-statebanks thatAKF 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 maintainbank accounts at a New York branch of Regions Bank, or that respondents maintain accounts at any other banking institutions over which this Court could exercisejurisdiction. Accordingly, it is hereby: ORDERED andADJUDGED that Motion Sequence 2 is GRANTED, and the FinalArbitrationAward, datedApril 24, 2024 (NYSCEF Doc. 30), issued inpetitioner'sfavor in MCA Claim No. 45411/2023 is CONFIRMED; and it is further ORDERED that the Clerk of the Court shall enterjudgment 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 5 of 6 Page 5 of 6 

### [* 5]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 whichpetitioner 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 furtherORDERED that petitioner shall serve a copy of this Decision and Order upon respondents, RegionsBank, and the Clerk ofthe General Clerk'sOffice withnotice ofentry withintwenty (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 reliefnot 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 courtrecords. 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 

# SHAHAl1ABI: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. 656005/2023 AKF Inc. d/b/a/ Fundkite v. HogWild Gulf Shores, LLC et al. Mot. Seq. Nos.1 & 2 6 of 6 Page 6 of6 

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