Court Opinion

ID: 9958778
Source: CourtListenerOpinion
Date Created: 2024-04-09 20:11:39.64648+00
Date Added: 2024-06-11T08:15:52.354295
License: Public Domain

56 E. Invs. LLC v Upreal Brooklyn LLC
               2024 NY Slip Op 31050(U)
                     March 28, 2024
             Supreme Court, Kings County
        Docket Number: Index No. 503964/2019
                Judge: Leon Ruchelsman
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
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 This opinion is uncorrected and not selected for official
                       publication.
FILED: KINGS COUNTY CLERK 03/28/2024 02:24 PM                                     INDEX NO. 503964/2019
NYSCEF DOC. NO. 187                                                        RECEIVED NYSCEF: 03/28/2024

         SUPREME COURT OF THE STATE OF NEW YORK
         COUNTY OF KING$' : CIVIL TERM: COMMERCIAL PART 8
         -----~------------------------ . ----                --x
         56 EAST INVESTORS LLC, individually as
         well as derivatively on behalf of EAST
         UPREAL LLG, and EAST UPREAL LLC,
                                        Plaintiffs,                    Decision arid otder

                        - against -                                 Index No. 503964/20.19

         UPREAL BROOI<LYN LLC, DAVID GOLDBERGERi
         EYAL YAGEV, BOAZ GILAD, ASSAF FITOUSSI
          &   BROOKLAND UPREAL LIMITED,                                    March 28, 2024
                                               Defendants,

                        - against -

         EAST UPREAL LLC,
                                        Nominal Defendant,

          -- ... -- --------- --      -------~ -- ~-------x
         PRESENT: HON. LEON RUCHELSMAN                                     Motion Seq. #8

                  The defendants   David Goldberger and Eyal            Yagev have moved

          pursuant to CPLR §3211 seeking to dismiss the amended complaint.

          The plaintiff opposes the motion..           Papers were submitted by the

          parties arid arguments held.        After reviewing all the arguments,

         this court now makes th€:! following determination.

                As recorded in prior orders, during 2014 the plaintiff 56 Ea.st

          Investors    LLG,   which   comprised   eighteen          individual   investors,

          invested over two million dollars            in a    real    estate development

          project located i;lt 56 Ea.st 2ist Street in Kings County.               Pursuant

          to the operating agreement defendants           D.avid Goldberger an,d Eyal

          Y:agev were made manag.ers o;f: the plaintiff corporation.             Further, in

          .connection with the proj eat E.ast Upteal LLC was fo.rmed which .had

          two mernl:iers., the plaintiff, .56 East Invest.ors LLC and defenda.nt

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FILED: KINGS COUNTY CLERK 03/28/2024 02:24 PM                                         INDEX NO. 503964/2019
NYSCEF DOC. NO. 187                                                            RECEIVED NYSCEF: 03/28/2024

         Upteal Brooklyn. LLC a holding company owned by defendant Brookland

          Upreal Limited,

                  Essentially,       the   amended    complaint      alleges   the   defendants

          defrauded the plaintiff by failing                  to invest the      funds and by

          committing        waste,     mismanagement,       gross    negligence      and     self ....

          dealing.      The amended coITtplaint alleges the entire investment has

          been lost.        The amended complaint alleges seven causes of action

          including breach Of fiduciary duty directly and derivatively, fraud

          directly and derivati ve,ly, an accounting, breach of contract and

          conversion.       The defendants have now moved, once again, seeking to

          dismiss the complaint.            While pribr c;r.ders held that any Israeli

          settlement reci.c:::hed concerning the bankruptcy of defendant Brookland

          Upreal Limited,          had no conriectioh to the plaintiff herein,                  the

          defendants now argue that subsequent activity compels the dismissal

          of this action.          Specifically, Guy Gissim the trustee of claims in

          the Israeli bankruptcy court entered into                   a creditor settlernent
          agreement     which      among   other     relief    provided a      methodology        of

          payment     to    creditors_        Foll.owing      that   settlemeht      all   claims

          existing in New York were settled except the claims in this case.

          In 2022 Gissim commenced an action in Kings County and pursuant to

          th·at    action    the     defendants    assert     the plaintiff     in    this    case

          assigned all e.pist.ing claims to Gissiin and that ;;3.ll claims w:ill be

          settled pursuant to I-sraeli iaw,            Gonsequerttly, the defendants move

          seeking     to dismis.s this action.         As noted, the motion is oppo.s.ed.

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FILED: KINGS COUNTY CLERK 03/28/2024 02:24 PM                             INDEX NO. 503964/2019
NYSCEF DOC. NO. 187                                                 RECEIVED NYSCEF: 03/28/2024

                                     Conclusions of Law

                 It is well settled that upon a motion to dismiss the co1.1rt

         must determine, accepting the allegations of the complaint as

         true, whether the party can succeed upon any reasonable view of

         those facts     (Perez v. Y & M Transportation Corporation, 219 AD3d

         1449, 196 NYS3d 145 [2d Dept., 2023]).         Furth~rj all the

         allegations in the complaint are deemed true ahd all reasonable
         inferences may be drawn in favor of the plaintiff (Archival Inc.;

         v. 177 Realty Corp., 220 AD3d 90·9, 198 NYS2d 5 67        [ 2d Dept.;

         2023]).      Whether the complaint will later survive a motion for

         summary judgment,     or w:hether the plaintiff will ultimately be
         able to prove its claims, of course, plays no part in the

         determination of a pre-discovery CPLR §3211 motion to dismi.ss

          (see, Lam v. Weiss, 219 AD3d 713, 195 NYS3d 488 [2d Dept.,

         2023] ) .

                 On July 20, 2023 the plairitiff in this action, referred to

         as 'Investors', assigned "(I) all of Investors 1 rightsi title and

         interest, in East Upreal LLC;     (ii)   any claims   (known and unknown)

         rielating the Project, the Investors and/or .East Upreal LLC Upreal

         Brooklyn LLC, Brooklyn Upreal Limited group of companies, its

         prior and current members and managers and their insurance

         company;     (iii) any claims Invet;;_tors asserteo. or could have

         asserted· in the action styled, 5 6 East Investors, LLC, e:t al v.

         Upreal Brooklyn, LLC,     et a.l. New York State Supreme Court, Kings
         County, Index No. 5039.6.4/2019" and further clairrt.s (see~

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FILED: KINGS COUNTY CLERK 03/28/2024 02:24 PM                           INDEX NO. 503964/2019
NYSCEF DOC. NO. 187                                               RECEIVED NYSCEF: 03/28/2024

         Assignment of Claims [NYSCEF Doc. No. 173]).        Thus; by its plain

          tersm the plaintiff has assigned "any claims" asserted in this

          act-ion.    The plaintiff argues that '\the assignment contained an

          annexed to the Gissim Settlement specifically contemplated

          the assignment and continuation of this Action by Gissin" (see,

          Memorandum in Opposition, page 2 [NYSCEF Doc. No. 178]).

          However, there can be no reasonable. interpretation of the

          assignment wherein claims in this action were permitted to

          continue.

                  Next, the plaintiff argues that East Upreal LLC was riot a

          party to the assignment and claims brought by East Upreal must

          continue.     However, the assignment states that Investors assigned

          its interests in East tlpreal.      Further, the assignment states

          that any claims Investors or East Upreal maintains against many

          parties including the defendants David Goldberger- and Eyal ·Yagev

          are hereby assigned to Gissirn.      Thus, any interests of East

          Upreal through its owner 56 East Investors LC have been assigned

          to Gissim..    Gonsequ_ently,   there are no claims that East Upreal

          LLC ~ay ~tidividu~lly pursue ?gainst the defendants in this

          action.

                  Nor does CPLR §1018 demand a contrary result.     CPLR §1018

          permitrs a par:t;:.y in interest .such as an assignee to continue a

          laWsuit in place of the original party.        It does npt siand 'for
          the proposition that when an assignment .has be.en ritade

          transferring all interests to a third party that third party must

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FILED: KINGS COUNTY CLERK 03/28/2024 02:24 PM                                INDEX NO. 503964/2019
NYSCEF DOC. NO. 187                                                    RECEIVED NYSCEF: 03/28/2024

         continue the lawsuit.         Indeed, the posture of the opposition is

         curious,       The plaihtifft owher of East     upreal assigned its
         interests in East Upreal and any claims against any of the

         defendants to Gissim.         East Up.teal, now denuded of any ability to

         pursue any claims, opposes the dismissal on the grounds it shou,1d

         be given the opportunity to pursue its claim in this action.

         That circular reasoning really has no legitimacy considering the

         assignment.       Any clairns a.te adequately protected by Gissim's

         pursuit      of therri. in Israel.   Therefore, there are no claims that

         can be pursued in this action.            Consequently; the motion of the

         defendants seeking dismissal of the complaint is granted.

                 So ordered.
                                          ENTER:

                                                                               .,,,.......,,,.

         DATED: March 28, 2024
                Brooklyn N.Y.                   Hon. Leon Ruchelsman
                                                JSC

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