### AKF Inc. v Be Slim Bariatrics LLC 2024 NY Slip Op 32850(U) August 13, 2024 Supreme Court, New York County Docket Number: Index No. 655467/2023 Judge: ShahabuddeenAbid 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. 36 INDEX NO. 655467/2023 RECEIVED NYSCEF: 08/13/2024 

### SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. SHAHABUDDEENABID ALLY 

### Justice PART16TR

AKF INC. d/b/a FUNDKITE, Petitioner, INDEX NO. MOTION DATES 655467/2023 6/13/2024 5/6/2024 -against- MOTION SEQ. NO. 001 & 002
BE SLIM BARIATRICS LLC, FREDERQUAKE DEAMANDADANZELL NUNSUCH, JENNIFER CHRISTINE NUNSUCH, and CLR PITCH 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): 1-11, 13, 15-23 The following e-filed documents, listed by NYSCEF document number, were read on this motion (Seq. No. 2) to/for ARTICLE 75 (CONFIRM AWARD): 24-34 This is a proceedingpursuantto CPLR 

### §§ 7502(c) and 7510. 1 Petitionerfirst moved by Order to Show Cause ("OSC"), filed on November 2, 2023, for a preliminary injunction in aid of arbitration, pursuantto CPLR 

### § 7502(c), torestrainrespondents' bankaccountspending an award in an underlying arbitration proceeding, which was initiated on December 6, 2023, shortly after theCourt signed the OSC. Nowthatthefinal arbitration awardhasbeenissued, petitionermoves by Notice of Motion, dated April 4, 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 are consolidatedhereinfor 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. 655467/2023 AKF Inc. d/b/a/ Fundkite v. Be Slim Bariatrics LLC et al. Mot. Seq. Nos. 1 & 2 1 of 6 Page 1 of 6 

### [* 1]NYSCEF DOC. NO. 36 INDEX NO. 655467/2023 RECEIVED NYSCEF: 08/13/2024 

### In a writtenRevenue PurchaseAgreement, datedJanuary 18, 2023 (the "RPA"), theparties agreed to enterinto a nonrecourse cash advancetransaction whereby respondentBE SLIM BARIATRICS LLC ("Be Slim") agreed to sell $239,472.00 ofits future receiptstopetitionerin exchange for an upfront lump-sum payment of $166,300 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 CivilArbitration, Inc. ("MCA") orJAMS. (Id. 

### 14.14) TheRPA providesfor a weekly "delivery" amountof$5,986.80 from Be Slim'sreceipts via an automatic debit from its designated bank, witha monthlyreconciliation. Thedesignatedbank accountis held with Bank ofAmerica. Petitioner alleges that, beginning onJuly 25, 2023, and continuing on September 7, 2023, after a failed attempt at reconciliation of payments owed, Be Slim's scheduled weekly debit of receipts from Bank of America was declined because thebank had stopped payment. Petitioner further asserts that Be Slim did not inform petitioner whether the bank account hadbeen closed orotherwiseattempt to demonstrate any supposed downturn in the amountof Be Slim's weekly receipts, as would havebeenpermitted under the RPA. Petitioner alleges generally that "there is no reason for a merchant to refuse to deliver their share of Receipts orblock Fundkite's access to the Designated Account, unless the Merchanthasno intention ofcomplying with the RPA," and that "it has been Fundkite's experience that merchants who refuse to deliver their share of Receiptsattemptto avoidcollectionbyremoving allfundsfrom theDesignatedAccount." (NYSCEF Doc. 1, 11 36, 38) Petitioner commenced this proceeding on November 2, 2023. By signing the initiatory OSC, the Court temporarily restrained Bank ofAmerica 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 theRPA. On December 6, 2023, petitioner filed a Demand for Arbitration with MCA seeking $159,763.15, inclusive of interest, attorney's fees, and costs. (NYSCEF Docs. 18-19) On March 28, 2024, the MCA arbitrator issued a FinalArbitration Award in petitioner's favor in the amount of $164,303.45, inclusive of interest, attorney's fees, and costs, plus pre-judgment interest at 9% per annum. (NYSCEF Doc. 33)

655467/2023 AKF Inc. d/b/a/ Fundkite v. Be Slim Bariatrics LLC et al. Mot. Seq. Nos.1 & 2 2 of 6 Page2 of6 

### [* 2]NYSCEF DOC. NO. 36 INDEX NO. 655467/2023 RECEIVED NYSCEF: 08/13/2024 CPLR § 7510 provides that a court shallconfirm 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 unlessvacatur 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't2009). 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 thetime in which respondents may move to do sohas expired. 

### See CPLR § 751l(a) (''An application to vacate or modify an award may be madeby a party within ninety days after its delivery to him."). Respondentshaveneither appeared in this proceeding nor opposed petitioner's application. Therefore, the Court confirms the Final Arbitration Award and directs thatjudgment 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 connectionwith an arbitration that is pending or that is to be commenced inside or outsidethis 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 ofarticle 62 and 63 ofthis chapter shall apply to this application
.... Tobeentitled to aninjunctionunder§ 7502(c), theFirstDepartmentrequiresboth a showing that 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 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 &

### BeyondInteriors, 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 seeking reliefunder[§ 7502(c)I must also make a showing of the traditional equitable criteria for thegranting of temporary reliefunderCPLR article 63.").

655467/2023 AKF Inc. d/b/a/Fundkite v. Be Slim Bariatrics LLC et al. Mot Seq. Nos. 1 & 2 3 of 6 Page3 of 6 

### [* 3]NYSCEF DOC. NO. 36 INDEX NO. 655467/2023 RECEIVED NYSCEF: 08/13/2024 

### Initially, petitioner's application is renderedmootby theissuance ofthe 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) [hereinafter

### AKFII] ("Since the arbitrationhasbeencompleted, andAKF has obtained all ofthe reliefthat it soughttherein, there is no longer a basis for granting relief in aid ofthe arbitration, and the petition mustbe denied as academic."). CPLR § 7502(c) expressly allows a court to issue a preliminary injunction in aid of an arbitration "thatis pending or that is to be commenced." Further, petitioner's Verified Petition itself sought a preliminary injunction "pendingtheresolutionoftheparties' arbitration." (Dkt. No. 1, <][ 

### 1 &

### p. 10) Thesubjectarbitration is no longer "pending" because a final award hasbeenissued. 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 ofthe action."'

### Int1 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)). Nordoes 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 irreparableharm 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 RM1 Acquisitions Grantor Trust, 217 A.D.3d 410, 412 (1st Dep't2023); 

### NoyackMed. Partners, LLCv. OSKIX, LLC, 206A.D.3d429,430 (1st Dep't2022); 

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

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

### CreditAgricole, 94 N.Y.2d at 548). The cases on which petitionerrelies are distinguishable. 

### H.I.G. Capital Management, Inc. v. Ligator, 233A.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 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

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### [* 4]NYSCEF DOC. NO. 36 INDEX NO. 655467/2023 RECEIVED NYSCEF: 08/13/2024 pursuantto 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); 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 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 preliminaryinjunctionin aidofarbitrationshouldnotbegrantedherefor the additional reason that petitionerhas failed establish that this Courthasjurisdiction over respondents' bank accounts. SeeAKFI, 2023 WL 8570844, at *2 (declining to attachrespondentbankaccountsbecause petitionerdidnotestablishthatrespondentsmaintained accounts at abranch located withinNew York); AKF II, 2024 WL 2420140, at *1 ("In any event, the granting of a preliminary injunction would have been improper
... [because] thecourtlackedjurisdiction over the out-of-statebanks thatAKF sought to restrain."). Here, petitioner's submissions demonstrate that all of the parties are California residents. Further, the OSC demonstrates thatBank ofAmerica was to be served in Delaware. None ofpetitioner's submissions demonstratesthatBank ofAmerica conducts anyrelevantbusinessin NewYork or that respondentsmaintainbank accounts at a NewYork branch of Bank of America, or that respondents maintain accounts at any other banking institutions over which this Court could exercisejurisdiction. Accordingly, itis hereby: ORDERED andADJUDGED thatMotion Sequence 2 is GRANTED, and the FinalArbitration Award, dated March 28, 2024 (NYSCEF Doc. 33), issued in petitioner's favor in MCA Claim No. 45346/2023 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 $164,303.45 plus interest at 9% per annum commencing from March 28, 2024, plus costs and disbursements; and it is further

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### [* 5]NYSCEF DOC. NO. 36 INDEX NO. 655467/2023 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 and entered on November 13, 2023, is VACATED and DISSOLVED; and it is further ORDERED that petitioner shall serve a copy of this Decision and Order upon respondents, Bank of America, 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);2 and it is further ORDERED that any requested reliefnot expressly addressed hereinhas 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 itis 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 NON-FINAL DISPOSITION GRANTED IN PART GRANTED IN PART SUBMIT ORDER FIDUCIARY APPOINTMENT 

# § OTHER OTHER STAY CASE REFERENCE

2 The protocols are available at https://www.nycourts.gov/Leg:acyPDFS/courts/ljd/supctmanh/Efil-protocol.pdf. 655467/2023 AKF Inc. d/b/a/Fundkite v. Be Slim Bariatrics LLC et al. Mot. Seq. Nos.1 & 2 6 of 6 Page6 of 6 

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