Court Opinion

ID: 9942018
Source: CourtListenerOpinion
Date Created: 2024-02-20 14:07:50.941685+00
Date Added: 2024-06-11T13:47:35.772445
License: Public Domain

David v Arbie Processing, LLC
               2024 NY Slip Op 30476(U)
                   February 13, 2024
             Supreme Court, Kings County
        Docket Number: Index No. 517803/2023
                Judge: Leon Ruchelsman
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                       publication.
  FILED: KINGS COUNTY CLERK 02/13/2024 10:02 AM                                                                            INDEX NO. 517803/2023
  NYSCEF DOC. NO. 38                                                                                                RECEIVED NYSCEF: 02/13/2024

            SUPREME C::OURT OF THE STATE OF NEW YORK
            COUNTY OF KINGS : CIVIL TERM: COMMERCIAL PART 8
            - -.-- - -·- - - - · - - - - - - - -    . - -·-·-·- - - - - - - - . - - - - - - - - - -·X.
            SNIR DAVID,
                                                                           Plaintiff,                            Decision and order

                                   - against -                                                            Index No. 517803/2023

            ARBIE PROCESSING, LLC, RON BOROVINSKY
            and ELIZABETH BOROVINSK,
                                          Defendants,                                                             February 13, 2024
            --- .. --. ---.----.-------·------- ·-· ·-. ------- ·-x
            PRESENT: HON. LEON RUCHELSMAN                                                                           Motion Seq, #2

                       The defendant has moved pursuant                                         to CPLR           §602     seeking to

            consolii:iate this matter with seven related matters,                                                        namely Snir

            David         v.     )250         Jefferson               Management              LLC,         e·t    al.,     Index    No.

            532287 /2 023, Snir David v. Elizabeth Borovinsky, et al., Index No.

            532368 /2023,             Snir David v. Elizabeth Borovinsky, et al., Index No.

            53237 5/2023, Snir David v. Arbie Processing LLC, et al.; located in

            Nassau         County           Index          No.      609726/2023,                Snir       David      v.    Elizabeth

            Borovinsky,                et          al. ,      located            in      Nassau            County,         Index   No.

            618010/2023, Snir David v. RQV 22 Equities, LLC, e.t al., located in

            Queens County, Index No.                             723591/2023 and Snir David v. 10953 109

            Street Holdings LLC, et al.,                                  located in Queens County,                         Index No.

            723594/2023.                  The        plaintiff             opposes           the         motion.         Papers    were

            submitted by the parties and arguments held.                                                   After reviewing all

            the arguments this. court now makes. th.e following determin!3,tion.

                       In this action the plaintiff has. sued seeking. to enforce

            repayment of a loi;i.n ma,de to ~efendcl.nt A.rl:>i.e Processing tLC .in 20),8.

            The     other        seven         actions           all       involve the               same        loari but concern

            d,iff1;::+:"ent     properties purchased .by clefendant Arbie ; and ¢1efe,ndant

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  NYSCEF DOC. NO. 38                                                                      RECEIVED NYSCEF: 02/13/2024

            l3orovinsky upon which the plaintiff has filed notices of pendency.

            This motion for consolidation has now been filed.

                                               Conclusions of Law

                  It is well settled that when two or more cases represent common

            questions of         law or      fact   then   there          should be a      consolidation

            (Moses v. B & E Lorge Fa.milt Trust, 147 AD3d 1043, 48 NYS3d 427 [2d

            Dept.,     2017]).         A party objecting to the consolidation has the

            burden of demonstrating prejudice which ha.trris                     a substantial right
            (Oboku v. New York City Transit Authority,                        141 AD3d 708, 35 NYS3d

            710    [2d Dept.,     2016]).

                     In this case the eight lawsuits clearly concern the same

            questions of law and fact,              namely a loan made and allegedly never

            repaid.       The      plaintiff        asserts         that     "although      the     actions

           Defendants are seeking to consolidate concern the same Agreement,

            the Defendants purc:hased the properties in the names of independent

            companies rather than in the name Of ARBIE despite RON and ARBIE

            attaching     a   list      Of   properties        to    the af'oresaid agreement and

           holding them out as being owned by ARBIE"                            ( see,   Affirmation in

           Opposition, '][12       [NYSCEF Doc. No. 2 7]) .                However,      even: if that is

           true that does not explain why all these matters cannot be decided

           withirt one lawsuit,              This is especi~Iiy trtie corisidering they all

            concern the       sam12:    underlying     facts.             Further,    it is :trµe        that

           denying      consoli.dation         based   upon         the    different      'states   of   the

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            respective cases and hence expediting the trial ready case has been

            held proper (see, Abrams v.                    Port Authority Trans-Hudson Corp., 1

            AD3d 118, 7 6 6 NYS2d 42 9 [ pt Dept., 2003] ) .                          However, these cases

            are all essentially at the same early stages of discb~ery and no

            prejudice           or     harm     could    possibly       result    if     consolidation      is

            granted.        Therefore;            based on the foregoing,              the motion seeking

            consolidation is granted.

                   Next,         the       defendants     move      seeking      to    dismiss     the   seven

            lawsuits        on       the    grounds      they    are    duplicative       of     the   current

            lawsuit.        The agreement entered between the parties states that

           Arbie specialized in rehabilitating and selling distressed real

            estate and that the funds invested would be used in ''indivi<:iual

            projects" ( ~ ; Passive Investment Opportunity: Scope of Investment

            [NYSCEF boc. No. 16]).                  Thus, while the actual properties were not

           defined         ih        the    agreement,     clearly,          multiple     prop,erties    were

           contemplated.                   At   this-   stage    of    the    litigation,      without    any

           discovery, the restraints placed upon properties owned by Arbie is

           proper.         Thus, the consolidated action has combined all the claims

            in this lawsuit, howe:Ver, the propriety of the notices of pendency

           filed against all the properties will not be disturbed at this

            june,:ture'.        Thus, the motion seeking to dismiss those lawsuits is

           denied at this time.

                  The motion seeking to cancel the notice o,f pendency regarding

           27 Lakeville Drive, East Hillsf New York is granted.

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  NYSCEF DOC. NO. 38                                                                                 RECEIVED NYSCEF: 02/13/2024

                    Turning          to    the      motion        seeking      to     dismiss        the   individual

            defendants Ron andElizqbeth Borvinsky, to succeed on a request to

            pierce the corporate veil the plaintiff must demonstrate that "(1)

            the_    owners         exercised         complete        dominion          'bf   the     corporation     in

            respect to the transaction attqcked; and (2) that such dominion was

            used        to    comtnit     a   fraud       or      wrong    against           the    plaintiff     which

            resulted in plaintiff's injuryl' (Cana.son v. Megan Holding LLC, 25

            NY3d 1, 6 NYS3d 206 [2015]).                          As the Court of Appeals observed, at

            the pleading stage "a plaintiff must do more than merely allege

            that [defendant]               engaged in improper acts or acted in 'bad faith'

            while representing the corporation" (East Hampton Union Free School

            District          v.   Sandpebble Builders Inc,,                   16 NY3d 775,            919 NYS2d 496

            [2011 J) •         Rather,        the plaintiff must allege facts demonstrating

            such        dominion          over      the    corporation               and     that     "through     such

            domination, abused the privilege of doing business in the corporate

            form to perpetuate a wrong or injustice a9ainst the plaintiff such

            that a court in equity will intervene" (Oliveri Construction Corp.,.

            V.     WN    weaver      Street      LLC,      14 4    AD3d     7 €35,    41     NYS3d    59   [2d   Dept.,

            2016]).            "Factors        to    be    considered          in     determining          whether   an

            individual             has    abused     the       privilege        of     doing        business     in the

            corporate or LLC form include the failure to adhere to [corporate

            or]     LLC      formalities,           inadequate           capitalization,             commingling of

            pas.sets,        apq. the. personal use .of                  [corporate or] LLC f:unds'I              (see:,

            Gra:mmas v. Lockwood Associates LLC, 9.5 AD3d 1073, 944. NYS2d 623 [2d.

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            Dept.,      2012]).            Thus,     mere     conclusory             statements      that    the

            individual dominated the corporation are insufficient to defeat a

            motion to dismiss (AHA Sales Inc. , v. Creative Bath Products Inc.,

            58 AD3d 6,       867 NYS2d 169 [2d Dept.i 2008]).

                   In      this     case     there     is      no       evidence       presented       at    all

            demonstrating either def·endant acted in ways in which the corporate

            veil can be pierced.             Therefore, the motion seeking to dismiss the

            individual defendants is granted.

                   The plaintiff has filed motions in the other actions seeking

            pre-judgement attachment that will now be addressed.

                   It   is        well     settled     that        a     party       seeking      pre-judgment

            attachment .must demonstrate, "by affidavit and such other written

            evidence as may be submitted, that there is a cause of action, that

            it is probable that plaintiff will succeed on the merits, that one

            or more grounds for attachment provided in CPLR .§6201 exist and

            that     the     amount        demanded         from        the     defendant         exceeds    all

            counterclaims known to the plaintiff" (Elliot Associates L.P., v,

            Republic of Peru,            948 F.Supp 1203          [S.D.N. Y .•    1996.]).        The basis for

            the attachment is to provide security to insure the enforcement of

            any money judgement              (see,   Hotel 71 Mezz Lender LLC v.                     Falor, 14

            NY3d   303, 9C)0 NYS2d 69.S [2010]).

                CPLR       §62 01    provides        five     dist:i.ntt        grounds      permitting      the

            .attachment      bf     prope.rty      in an action              where    th.e   party would. be

            entitled to           a money judgement.                   The    p1aint,iff     is    seeking   th.e

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  NYSCEF DOC. NO. 38                                                                  RECEIVED NYSCEF: 02/13/2024

            attachment on one ground, namely that "the defendant, with intent

            to     defraud      his     creditors     or    frustrate     the    enforcement         of   a

            judgement       that      might   be     rendered       in   plaintiff's        favor,    has

            assigned, disposed of, encumbered or secreted property, or removed

            it from the state or i.s about to do any of thes·e acts (see, CPLR

            §6201 (3)).

                    Attachment is         a drastic        remedy    which    should be construed

            narrowly in favor of the party against whom it is sought (Michaels

            Electrical Supply Corp., V-. Trott Electric Inc., 231 AD2d 695, 647

            NYS2d 839 [2d Dept., 1996]) .                 Thus; to succeed upon the attachment

            r:equest it must be demonstrated the defendant acted with the. intent

            to frustrate the enforcement of a judgement (Abacus Federal Savings

            Bci.nk V.    Lim,     8 AD3d 12,       778 NYS2d 145         [1 st Dept.,    2004]).      The

            disposition o:f the property without the requisite intent is an

            insufficient basis upon which to attach property (Sylmark Holdings

            Ltd.    V.   Silicone Zone Intern.             Ltd., 5 Misc3d 285,          783 NYS2d 758

            [Supreme Court New York County 2004 Ll .

                       Thus I     the    plaintiff         must    demonstrate        the    tleifendants

            intentionally sought to frustrate the enforcement of a judgement by

            disposing of its assets              (Silverman v. Miranda,              116 F. Supp3d 289

            [g_o.N,Y. 2015]),

                    The plaintiff does not present any evidenc-e supporting the

            contention          the   property      has    heen    disposed     of    to. frustrate        a

            potential judgement;              The plaintiff essentially argues that                       of

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            course the defendants intention is to frustrate                                   any judgement,

            since why else would the property be so disposed.                                      However, that

            c::ircular argument lacks any evidence supporting the allegation.

            Essentially,      that      argument        boils       down    to      the      fact     that     since

            property has been removed an attachment is proper.                                        As already

            noted the mere removal -of assets is not grounds for an attachment

            (Corsi v. Vroman, 37 AD3d 397,                829 NYS2d 234 [2:d Dept. 2007]).                        To

            support     a   request       for   attachment            the      plaintiff           must      present

            evidentiary      facts       and    circumstances               tending          to     establish      a

            probability that such intent exists (Ros:enthal v. Rochester Button

            Company Inc.,     148 AD2d 375 539 NYS2d 11 [Pt Dept.,                                 1989]) .     This

           means there must be evidence that fraudulent or improper intent

            existed in the mind of the defendants (DLJ Mortgage Capital Inc.,

            v,   KOntoqiannis, 594 F.Supp2d 308 [E.D·.N.Y. 2009].).                                  To be sure,

            since fraudµlent           or improper intent is difficult to prove courts

            have developed         'badges of fraud'              which can give rise to intent.

            Although the stated basis for the attachment in this case is the

            frustration      of    a   judgem<:'lnt,    the       a11.alysis     is    the    same     a.s    fraud.

            Such badges of fraud include g·ross inadequacy of consideration, a

            close      relationship        bet we.en      tra,ns f e ror         and        transferee,          the

            transferor 1 s        insolvency      as     a        result       of     the         conveyance,      a

            questi9pable      transfer not             in the       ordinary          course       of business,

            secrecy in the transfer and retention .o.f control of the property by

            the. tr.ansferor a(ter th.e conveyance                    (seet      In re Kaiser,               722 F2d

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            15 7 4 [ 2.d Cir . 1 98 3 ] ) .

                       As noted, the plaintiff does not support these allegations

            of frustration of judgement with any evidentiary facts at all.                          The

            plaintiff merely seeks             to    secure_ funds       in   case    they     secure a

            judgement.        Where no evidence supporting the allegation has been

            ptesented then attachment is hot proper (Singapore Tong PTE Ltd;,

           V. Corrado Coppola, 2004 WL 1936296 [E.D.N.Y. 2004]).
                       Therefore,      based    on    the       foregoing,    the     motion    seeking

            attachment of any of the subject properties is denied.                             Further,

            the plaintiff's motion seeking to amend the complaint is denied to

           the extent none of the causes of action may involve any dismissed

            party or attachment.              The remainder of tbe request to amend the

            complaint, if any, is granted.

                       So ordered.

                                                ENTER:

            DATED: February 13, 2024
                       Brooklyn N,Y,                  Hein.
                                                       JSC
                                                                      7J
                                                                 Leon Ruchel.srrian

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