Preview
FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021
NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
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JOSEPH J. SARCONA, JR., a shareholder of JJS Index No. 614075/2021
TRANSPORTATION AND DISTRIBUTION CO.,
INC., suing in the right of JJS TRANSPORTATION Motion Sequence No. 4
AND DISTRIBUTION CO., INC., and JOSEPH J.
SARCONA, JR., individually, Hon. Timothy S. Driscoll, J.S.C.
Plaintiff,
-against-
JOSEPH J. SARCONA III, JJS TRANSPORTATION
AND DISTRIBUTION CO., INC., JJS
TRANSPORTATION AND DISTRIBUTION CO.,
INC. OF PA, JFM LOGISTICS MANAGEMENT,
INC., and LEAR MANAGEMENT, INC.,
Defendants.
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DEFENDANT JOSEPH J. SARCONA III’S MEMORANDUM OF LAW IN
OPPOSITION TO PLAINTIFF JOSEPH J. SARCONA, JR.’S MOTION FOR LEAVE
TO AMEND THE COMPLAINT
RIVKIN RADLER LLP
926 RXR Plaza
Uniondale, New York 11556-0926
Telephone: (516) 357-3000
Facsimile: (516) 357-3333
Attorneys for Defendants Joseph J. Sarcona III
Of Counsel:
Brian L. Bank, Esq.
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .........................................................Error! Bookmark not defined.
PRELIMINARY STATEMENT .................................................................................................... 1
STATEMENT OF FACTS AND PROCEDURAL HISTORY...................................................... 2
STANDARD OF LAW................................................................................................................... 4
ARGUMENT .................................................................................................................................. 4
I. THE MOTION SHOULD BE DENIED DUE TO PLAINTIFF’S FAILURE TO TIMELY
FILE A REDLINE PER N.Y. C.P.L.R. 3025(b) ................................................................ 4
II. PLAINTIFF’S MOTION MUST BE DENIED BECAUSE THE PROPOSED
AMENDMENTS ARE PALPABLY INSUFFICIENT AND PATENTLY DEVOID OF
MERIT ................................................................................................................................ 5
A. The Proposed Fourteenth Cause of Action for Breach of Fiduciary Duty Fails to State
a Claim and is Precluded by Documentary Evidence ................................................ 5
B. The Proposed Fifteenth Cause of Action for an Accounting and Inspection of the
Books and Record of JJS PA Fails to State a Claim .................................................. 8
C. The Proposed Amendment to the Thirteenth Cause of Action for Conversion Fails to
State a Claim .............................................................................................................. 9
III. THE PROPOSED AMENDED COMPLAINT ASSERTS NO CAUSES OF ACTION
AGAINST JFM OR LEAR ............................................................................................... 10
CONCLUSION ............................................................................................................................. 10
ATTORNEY CERTIFICATION .................................................................................................. 11
CERTIFICATION OF COMPLIANCE ....................................................................................... 11
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TABLE OF AUTHORITIES
Page(s)
Cases
9310 Third Ave. Assocs., Inc. v. Schaffer Food Serv. Co.,
210 A.D.2d 207, 620 N.Y.S.2d 255 (2d Dep’t 1994) ................................................................9
Adam v. Cutner & Rathkopf,
238 A.D.2d 234, 656 N.Y.S.2d 753 (1st Dep’t 1997) ...............................................................8
Aversano v. Macnamara,
No. 07643/2010, 2010 N.Y. Misc. LEXIS 5461 (Sup. Ct. Suffolk Cnty. Oct.
27, 2010) ....................................................................................................................................7
Benjamin v. Yeroushalmi,
178 A.D.3d 650, 115 N.Y.S.3d 60 (2d Dep’t 2019) ..............................................................6, 8
Castellotti v. Free,
138 A.D.3d 198, 27 N.Y.S.3d 507 (1st Dep’t 2016) .................................................................9
Castillo v. Starrett City, Inc.,
4 A.D.3d 320, 772 N.Y.S.2d 74 (2d Dep’t 2004) ......................................................................4
Dee v. Rakower,
112 A.D.3d 204, 976 N.Y.S.2d 470 (2d Dep’t 2013) ................................................................8
Dimich v. Med-Pro Inc.,
34 A.D.3d 329, 826 N.Y.S.2d 3 (1st Dep’t 2006), appeal denied,
8 N.Y.3d 904, 834 N.Y.S.2d 76 (2007) .....................................................................................4
Jones v. LeFrance Leasing Ltd Partnership,
127 A.D.3d 819, 7 N.Y.S.3d 352 (2d Dep’t 2015) ....................................................................4
In re Kenneth Cole Productions, Inc.,
27 N.Y.3d 268, 32 N.Y.S.3d 551 (2016) ...................................................................................6
Litvinoff v. Wright,
150 A.D.3d 714, 54 N.Y.S.3d 22 (2d Dep’t 2017) ....................................................................6
NHD Nigani, LLC v. Angelina Zabel Props., Inc.,
161 A.D.3d 758, 77 N.Y.S.3d 78 (2d Dep’t 2018) ....................................................................4
Norman v. Ferrara,
107 A.D.2d 739, 484 N.Y.S.2d 600 (2d Dep’t 1985) ................................................................4
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Palazzo v. Palazzo,
121 A.D.2d 261, 503 N.Y.S.2d 381 (1st Dep’t 1986) ...............................................................8
Recine v. Soil Solutions, Inc.,
63 A.D.3d 710, 879 N.Y.S.2d 338 (2d Dep’t 2009) ..................................................................9
SH575 Holdings LLC v. Reliable Abstract Co., L.L.C.,
195 A.D.3d 429, 149 N.Y.S.3d 62 (1st Dep’t 2021) .................................................................9
Swartz v. Swartz,
145 A.D.3d 818, 44 N.Y.S.3d 452 (2d Dep’t 2016) ..................................................................6
Tsatskin v. Kordunsky,
No. 521941/2017, 2018 N.Y. Misc. LEXIS 4879 (Sup. Ct. Kings Cnty. Oct.
19, 2018), aff’d, 189 A.D.3d 1296, 138 N.Y.S.3d 641 (2d Dep’t 2020) ...............................6, 8
Crucen ex rel. Vargas v. Leary,
55 A.D.3d 510, 867 N.Y.S.2d 49 (1st Dep’t 2008) ...................................................................4
Other Authorities
N.Y. C.P.L.R. § 3016 (b) .............................................................................................................6, 7
N.Y. C.P.L.R. § 3019 ...................................................................................................................2, 3
N.Y. C.P.L.R. § 3025 .......................................................................................................................1
N.Y. C.P.L.R. § 3025(b) ......................................................................................................1, 3, 4, 5
23 N.Y. Jur. 2d, Conversion § 12, at 218.........................................................................................9
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PRELIMINARY STATEMENT
Defendant Joseph J. Sarcona, III (“JS3”) respectfully submits this memorandum of law in
opposition to Plaintiff Joseph J. Sarcona, Jr.’s (“Plaintiff”) motion pursuant to N.Y. C.P.L.R. 3025
for leave to amend his complaint (the “Motion”). Despite Plaintiff’s protestations that this action
is moving far too slowly, Plaintiff nonetheless aids its unhurried pace with the Motion, which seeks
to amend Plaintiff’s complaint for a second time, but which proffers only futile amendments that
do not contribute to the progress of this litigation.
As an initial matter, Plaintiff’s Motion is procedurally defective and should be denied. As
the Court noted during the January 4, 2023 conference, the C.P.L.R. requires a party seeking leave
to amend a pleading to attach “the proposed amended or supplemental pleading clearly showing
the changes or additions to be made to the pleading.” N.Y. C.P.L.R. 3025(b). After Plaintiff failed
to comply with this provision, the Court extended Plaintiff’s deadline to submit a redline of the
proposed edits to January 13, 2023 – a deadline that Plaintiff failed to meet. Further, when Plaintiff
finally did submit a redline of his proposed Amended Complaint, it did not show the proposed
changes as against the operative pleading. The Court should deny Plaintiff’s Motion on this basis
alone.
Even if the Court were to consider the tardily filed redline of the proposed amended
complaint, it should nonetheless deny the Motion on the ground that the proposed amendments are
futile. Specifically, the proposed amended complaint purports to add two additional causes of
action – (i) breach of fiduciary duty by JS3 to JJS Transportation & Distribution Co., Inc. (“JJS
NY”) based on the formation of JJS Transportation & Distribution Co., Inc. (Pennsylvania) (“JJS
PA”), and (ii) an accounting and inspection of the books and records of JJS PA – while also adding
three paragraphs to the existing conversion claim.
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With respect to the breach of fiduciary duty claim, Plaintiff’s proposed cause of action is
palpably insufficient and patently devoid of merit. As demonstrated by documentary evidence,
JS3 formed JJS PA at a time when he had no ownership interest in JJS NY. As such, JS3 owed no
fiduciary duty to JJS NY at that time, thus precluding Plaintiff’s proposed cause of action.
Furthermore, Plaintiff is not, and was never, a shareholder of JJS PA. Accordingly, Plaintiff lacks
the right to demand an accounting of its records. Finally, to the extent that Plaintiff’s proposed
amended complaint purports to assert the conversion cause of action as against JJS PA, that
proposed amendment fails (along with the rest of that cause of action) because Plaintiff has failed
to allege that the allegedly converted funds are specifically identifiable and subject to an obligation
to be returned or to be otherwise treated in a particular manner. Since all of the causes of action
that Plaintiff seeks to add to the complaint are futile, the Court should deny the Motion in its
entirety.
In addition, JS3 notes that in addition to JSS PA, Plaintiff’s proposed amended complaint
purports to name JFM Logistics Management, Inc. (“JFM”) and Lear Management, Inc. (“Lear”)
as defendants in this action. Since Plaintiff has not alleged any causes of action as against these
entities – existing or proposed – these entities, along with JSS PA, should be dismissed as
defendants in this action, to the extent that they were properly added as defendants to begin with.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
On or about November 8, 2021, Plaintiff commenced this action by filing the original
Summons and Complaint, which asserted thirteen causes of action against JS3 and/or JJS NY. See
NYSCEF Doc. No. 1. On or about January 31, 2022, JS3 and JJS NY filed what was styled as a
Summons to Additional Counterclaim Defendants Pursuant to CPLR § 3019 and a Verified
Answer to Complaint with Counterclaims. See NYSCEF Doc. No. 45-46. The “Counterclaims”
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consisted of seven causes of action against JS2 and what were styled as additional counterclaim
defendants – Sarcona Management Inc. and nine other individuals. See NYSCEF Doc. No. 46 at
¶¶ 222-415. JS3 and JJS NY served the Summons to Additional Counterclaim Defendants
Pursuant to CPLR § 3019 and Verified Answer to Complaint with Counterclaims on the ten
additional counterclaim defendants. See NYSCEF Doc. No. 49, 50, 51, 59, 60, 61, 62, 63, 64, 65.
On or about February 9, 2022, Plaintiff filed an Amended Summons and Amended
Complaint purporting to add JJS PA, JFM, and Lear as defendants, but not asserting any causes of
action as against those parties. See NYSCEF Doc. No. 48. On or about February 25, 2022, JS3
and JJS NY filed a Verified Answer to the Amended Complaint. See NYSCEF Doc. No. 75.
Finally, on March 30, 2022, the counterclaim defendants (including JS2 and the ten additional
counterclaim defendants) filed a Verified Answer to the Counterclaim and Third-Party Claim. See
NYSCEF Doc. No. 92.
Plaintiff brought the instant motion for leave to amend via notice of motion filed on or
about October 10, 2022 and assigned as Motion Sequence No. 004. See NYSCEF Doc. No. 133.
Plaintiff’s moving papers failed to include the requisite “proposed amended or supplemental
pleading clearly showing the changes or additions to be made to the pleading.” N.Y. C.P.L.R.
3025(b). On January 4, 2023, during a conference before the Court, the Court directed (i) Plaintiff
to file a redline of the proposed amended complaint by January 13, 2023, (ii) Defendants to file
any opposition to the Motion by February 3, 2023, and (iii) Plaintiff to file any reply papers in
further support of the Motion by February 10, 2023, with (iv) oral argument on the Motion to
proceed on February 16, 2023 at 3:30 p.m. See Affirmation of Brian L. Bank, dated February 3,
2023 (“Bank Aff.”) at ¶ 4, Ex. A at 4:25-7:7. Despite the Court’s directive, Plaintiff waited until
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January 19, 2023 – almost an entire week after it was due – to file a redline of the proposed
amended complaint. See NYSCEF Doc. No. 171-172; Bank Aff. at ¶ 5.
STANDARD OF LAW
“Although leave to amend should be freely given in the absence of prejudice or surprise to
the opposing party (see CPLR § 3025(b)), the motion should be denied where the proposed
amendment is palpably insufficient or patently devoid of merit.” NHD Nigani, LLC v. Angelina
Zabel Props., Inc., 161 A.D.3d 758, 761, 77 N.Y.S.3d 78, 81 (2d Dep’t 2018) (internal quotation
marks and citation omitted); Jones v. LeFrance Leasing Ltd Partnership, 127 A.D.3d 819, 821, 7
N.Y.S.3d 352, 355 (2d Dep’t 2015). Where an amendment is wholly devoid of merit or is
significantly prejudicial to the non-moving party, leave should be denied. See Norman v. Ferrara,
107 A.D.2d 739, 740, 484 N.Y.S.2d 600, 601 (2d Dep’t 1985). Put differently, leave to amend
will be denied where the proposed amendment would be futile. See, e.g., Crucen ex rel. Vargas v.
Leary, 55 A.D.3d 510, 512, 867 N.Y.S.2d 49, 51 (1st Dep’t 2008); Dimich v. Med-Pro Inc., 34
A.D.3d 329, 330, 826 N.Y.S.2d 3, 2 (1st Dep’t 2006), appeal denied, 8 N.Y.3d 904, 834 N.Y.S.2d
76 (2007); Castillo v. Starrett City, Inc., 4 A.D.3d 320, 322, 772 N.Y.S.2d 74 (2d Dep’t 2004).
ARGUMENT
I. THE MOTION SHOULD BE DENIED DUE TO PLAINTIFF’S FAILURE TO
TIMELY FILE A REDLINE PER N.Y. C.P.L.R. 3025(b)
In the first instance, the Court should deny Plaintiff’s motion for leave to amend due to
Plaintiff’s own failure to comply with the Court’s briefing schedule for the Motion. As noted
above, when Plaintiff filed the Motion back in October 2022, he failed to attach the requisite
“proposed amended or supplemental pleading clearly showing the changes or additions to be made
to the pleading” as required by N.Y. C.P.L.R. 3025(b). During the January 4, 2023 conference
before the Court, the Court directed (i) Plaintiff to file a redline of the proposed amended complaint
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by January 13, 2023, (ii) Defendants to file any opposition to the Motion by February 3, 2023, and
(iii) Plaintiff to file any reply papers in further support of the Motion by February 10, 2023, with
(iv) oral argument on the Motion to proceed on February 16, 2023 at 3:30 p.m. See Bank Aff. at
¶ 4, Ex. A at 4:25-7:7. Despite the Court’s directive, Plaintiff waited until January 19, 2023 –
almost an entire week after it was due – to file a redline of the proposed amended complaint. See
NYSCEF Doc. No. 171-172; Bank Aff. at ¶ 5. Further, the redline filed by Plaintiff on January
19, 2023 was based not off the February 9, 2022 Amended Complaint, which was the operative
pleading throughout the pendency of the Motion, but rather on Plaintiff’s original Complaint.
Compare NYSCEF Doc. No. 172 with NYSCEF Doc. No. 1, 48; see also NYSCEF Doc. No. 171
at ¶ 2. On this basis alone, the Court should deny Plaintiff’s Motion as noncompliant with N.Y.
C.P.L.R. 3025(b).
II. PLAINTIFF’S MOTION MUST BE DENIED BECAUSE THE PROPOSED
AMENDMENTS ARE PALPABLY INSUFFICIENT AND PATENTLY DEVOID
OF MERIT
Even if the Court were inclined to consider Plaintiff’s defective Motion, which it should
not, Plaintiff’s Motion nonetheless fails because each of his proposed amendments are palpably
insufficient and devoid of merit.
A. The Proposed Fourteenth Cause of Action for Breach of Fiduciary Duty Fails
to State a Claim and is Precluded by Documentary Evidence
Plaintiff’s proposed fourteenth cause of action alleges that JS3 breached his fiduciary duty
to JJS NY based on his formation of JJS PA. According to the proposed Amended Complaint,
“[JS3] formed JJS PA at some point after 2019. It is uncertain whether [Plaintiff] is or has ever
been a shareholder in JJS PA.” See NYSCEF Doc. No. 172 at ¶ 12. The proposed Amended
Complaint further alleges that “[JS3] violated his fiduciary duties to JJS NY by diverting assets to
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JJS PA” and “[JS3] violated his fiduciary duties to JJS NY by depriving JJS NY of assets and
diverting them to JJS PA.” NYSCEF Doc. No. 172 at ¶¶ 225-226.
“The elements of a cause of action to recover damages for breach of fiduciary duty are (1)
the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly
caused by the defendant’s misconduct.” Litvinoff v. Wright, 150 A.D.3d 714, 715, 54 N.Y.S.3d
22, 24 (2d Dep’t 2017) (internal citations omitted). “‘A cause of action sounding in breach of
fiduciary duty must be pleaded with particularity under CPLR 3016(b).’” Id. (quoting Swartz v.
Swartz, 145 A.D.3d 818, 823, 44 N.Y.S.3d 452, 460 (2d Dep’t 2016)). “[B]are and conclusory
allegations, without any supporting detail, [] fail[] to satisfy the requirements of CPLR 3016 (b).”
Benjamin v. Yeroushalmi, 178 A.D.3d 650, 654, 115 N.Y.S.3d 60, 64 (2d Dep’t 2019). “CPLR §
3016 (b) is satisfied when the facts suffice to permit a ‘reasonable inference’ of the alleged
misconduct.” Tsatskin v. Kordunsky, No. 521941/2017, 2018 N.Y. Misc. LEXIS 4879, at *5 (Sup.
Ct. Kings Cnty. Oct. 19, 2018), aff’d, 189 A.D.3d 1296, 138 N.Y.S.3d 641 (2d Dep’t 2020). It is
beyond dispute, however, that “[m]ere speculation cannot support a cause of action for breach of
fiduciary duty.” Id. (quoting In re Kenneth Cole Productions, Inc., 27 N.Y.3d 268, 278, 32
N.Y.S.3d 551, 558 (2016)).
Plaintiff’s proposed amendment fails for various reasons. First, to the extent that it is
“based on [the] formation of JJS PA[,]” as stated in the cause of action header, NYSCEF Doc. No.
172 at 27, Plaintiff’s own allegations, we well as documentary evidence, preclude this claim
because at the time JS3 formed JJS PA, he owed no fiduciary duty to JJS NY. Specifically,
although Plaintiff loosely alleges that “[JS3] formed JJS PA at some point after 2019[,]” NYSCEF
Doc. No. 172 at ¶ 12, a basic modicum of due diligence reveals that JS3 actually formed JJS PA
on December 21, 2018. See Bank Aff. at ¶¶ 6-7; see also Affidavit of Joseph J. Sarcona III, dated
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February 3, 2023 (“JS3 Aff.”), Ex. A. Notably, according to Plaintiff’s own pleading, prior to
January 1, 2020, JS3 had no ownership interest in JJS NY, held no executive office with JJS NY,
and did not serve as a director of JJS NY. See NYSCEF Doc. No. 172 at ¶¶ 35-37. Further,
according to the proposed Amended Complaint, prior to January 1, 2020, JS3 lacked authority to
take action on behalf of JJS NY and its day-to-day operations, or to act on behalf of JJS NY as to
technical, operational, or financial matters. See NYSCEF Doc. No. 172 at ¶¶ 44-45. Those
functions had been vested solely in JS2. See NYSCEF Doc. No. 172 at ¶ 46.
Given that, according to the proposed Amended Complaint, JS3 was not an owner
(majority or minority), officer, or director of JJS NY at the time of JJS PA’s formation, JS3 owed
no fiduciary duty to JJS NY which JJS PA’s formation could have breached. See generally
Aversano v. Macnamara, No. 07643/2010, 2010 N.Y. Misc. LEXIS 5461, at *5 (Sup. Ct. Suffolk
Cnty. Oct. 27, 2010) (“As merely a minority shareholder, [defendant] was not a fiduciary and thus
cannot be liable for breach of any fiduciary duty and the third cause of action must also be
dismissed.”). Accordingly, Plaintiff’s proposed fourteenth cause of action – to the extent it is
based upon JS3’s formation of JJS PA – is palpably insufficient and devoid of merit.
To the extent that the proposed fourteenth cause of action is based upon JS3’s actions after
the formation of JJS PA, that claim still fails because it lacks the particularity required by N.Y.
C.P.L.R. 3016(b). Plaintiff’s proposed fourteenth cause of action alleges in conclusory fashion
that “JJS PA was initially formed to run payroll for JJS NY” and “[JS3] formed JJS PA and made
himself the sole shareholder[, thus] den[ying] [JS2] his rightful ownership in JJS PA [and]
breach[ing] his fiduciary obligation to Joe Sarcona by not making him a shareholder in JJS PA.”
NYSCEF Doc. No. 172 at ¶¶ 125-128. These assertions, however, cannot be reconciled with
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Plaintiff’s allegation that, at the time, he, not JS3, controlled the technical, operational, and
financial matters of JJS NY. See NYSCEF Doc. No. 172 at ¶ 46.
Further, Plaintiff’s allegations that JS3 funneled assets to pay wages and benefits to
himself, his wife, and other friends and family members are completely consistent with the notion
that JJS PA runs payroll for JJS NY, which is a family-operated business. Compare NYSCEF
Doc. No. 172 at ¶¶ 129-135 with NYSCEF Doc. No. 172 at ¶ 125. Simply put, Plaintiff’s proposed
amendments constitute nothing more than inuendo and mere speculation, and fail to provide any
factual detail as to any misconduct by JS3 that directly caused damage to JJS NY. As such, the
proposed amendments fail to permit the requisite reasonable inference necessary to sustain
Plaintiff’s proposed fourteenth cause of action. Benjamin, 178 A.D.3d at 654, 115 N.Y.S.3d at
64; Tsatskin, 2018 N.Y. Misc. LEXIS 4879, at *5.
Finally, it bears note that the proposed fourteenth cause of action – alleging that JS3
breached his fiduciary duty to JJS NY – is wholly duplicative of the first cause of action, which
asserts the very same claim.
B. The Proposed Fifteenth Cause of Action for an Accounting and Inspection of
the Books and Record of JJS PA Fails to State a Claim
In his proposed fifteenth cause of action, Plaintiff seeks an accounting and inspection of
the books and records of JJS PA. This proposed claim fails as a matter of law.
“The right to an accounting is premised upon the existence of a confidential or fiduciary
relationship and a breach of the duty imposed by that relationship respecting property in which the
party seeking the accounting has an interest.” Adam v. Cutner & Rathkopf, 238 A.D.2d 234, 242,
656 N.Y.S.2d 753, 759 (1st Dep’t 1997) (citing Palazzo v. Palazzo, 121 A.D.2d 261, 265, 503
N.Y.S.2d 381, 384 (1st Dep’t 1986)); see also Dee v. Rakower, 112 A.D.3d 204, 214, 976
N.Y.S.2d 470, 478 (2d Dep’t 2013). Claims for an accounting must be brought by a shareholder
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on behalf of the corporation. See Recine v. Soil Solutions, Inc., 63 A.D.3d 710, 711, 879 N.Y.S.2d
338, 339 (2d Dep’t 2009) (finding former shareholder lacked standing to seek accounting); see
also Castellotti v. Free, 138 A.D.3d 198, 210, 27 N.Y.S.3d 507, 518 (1st Dep’t 2016).
In the proposed Amended Complaint, Plaintiff expressly alleges that “[JS3] formed JJS PA
and made himself the sole shareholder.” NYSCEF Doc. No. 172 at ¶ 126; see also JS3 Aff. at ¶ 4.
Since, by Plaintiff’s own admission, he is not a shareholder of JJS PA, Plaintiff lacks standing to
demand an accounting and inspection of JJS PA’s books and records, and Plaintiff’s proposed
fifteenth cause of action must be rejected as palpably insufficient and devoid of merit. Moreover,
Plaintiff cannot seek an accounting with respect to JJS PA based upon a fiduciary relationship
because, as noted above, there is no fiduciary relationship between Plaintiff and JS3 with respect
to JJS PA.
C. The Proposed Amendment to the Thirteenth Cause of Action for Conversion
Fails to State a Claim
To the extent that the proposed amendment adding three paragraphs to Plaintiff’s existing
thirteenth cause of action for conversion are intended to assert that claim against JJS PA, Plaintiff’s
proposed amendment in this regard fails and must be rejected.
“Where a conversion claim is asserted with respect to money, the funds must
be specifically identifiable and be subject to an obligation to be returned or to be otherwise treated
in a particular manner.” SH575 Holdings LLC v. Reliable Abstract Co., L.L.C., 195 A.D.3d 429,
430, 149 N.Y.S.3d 62, 63 (1st Dep’t 2021). If “the allegedly converted money is incapable of
being ‘described or identified in the same manner as a specific chattel,’ it is not the proper subject
of a conversion action.” 9310 Third Ave. Assocs., Inc. v. Schaffer Food Serv. Co., 210 A.D.2d
207, 208, 620 N.Y.S.2d 255, 256 (2d Dep’t 1994) (quoting 23 N.Y. Jur. 2d, Conversion § 12, at
218).
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Here, Plaintiff baldly alleges that “[JS3] has diverted funds from JJS NY to JJS PA[, t]his
action was a conversion of JJS NY funds to JJS PA[, and t]his action was unlawful.” NYSCEF
Doc. No. 172 at ¶¶ 219-221. Plaintiff makes no attempt to describe or otherwise identify the
specific funds at issue as is required under New York law, further demonstrating Plaintiff’s
strategy of pursuing baseless claims in a deliberate attempt to extend litigation and force JS3 to
incur exorbitant expenses. As such, to the extent that the proposed amendments to the conversion
claim are intended to assert that claim against JJS PA, the proposed amended cause of action fails
as a matter of law.
III. THE PROPOSED AMENDED COMPLAINT ASSERTS NO CAUSES OF ACTION
AGAINST JFM OR LEAR
As established above, Plaintiff has failed to plead any legally viable causes of action against
JJS PA. Further, although the proposed Amended Complaint names JFM and Lear as defendants
in this action, it is devoid of any causes of action asserted against those entities. Absent any viable
causes of action asserted against JJS PA, JFM, and/or Lear, each of these parties should be
dismissed from the action.
CONCLUSION
For all of the foregoing reasons, the Court should (i) deny Plaintiff’s motion pursuant to
N.Y. C.P.L.R. 3025 for leave to amend the complaint, and (ii) award such other and further relief
as the Court deems just and proper.
Dated: Uniondale, New York Respectfully submitted,
February 3, 2023 RIVKIN RADLER LLP
/s/ Brian L. Bank
Brian L. Bank
926 RXR Plaza
Uniondale, New York 11556-0926
Telephone: (516) 357-3000
Attorneys for Defendant Joseph J. Sarcona III
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FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021
NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023
ATTORNEY CERTIFICATION
To the best of my knowledge, information, and belief, formed after an inquiry reasonable
under the circumstances, the presentation and filing of the papers herein are not “frivolous,” as
defined in subsection (c) of section 130-1.1 of NYCRR.
Dated: Uniondale, New York
February 3, 2023
/s/ Brian L. Bank
Brian L. Bank, Esq.
CERTIFICATION OF COMPLIANCE
Pursuant to Section 202.8-b of the Uniform Civil Rules for the Supreme Court & the
County Court, the undersigned attorney hereby certifies that the total number of words in the
foregoing opposition memorandum of law, exclusive of the caption, table of contents, table of
authorities, and signature block, is 3,230 according to the word-processing software used to
prepare the reply memorandum of law.
Dated: Uniondale, New York
February 3, 2023
/s/ Brian L. Bank
Brian L. Bank, Esq.
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Preview
FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU -----------------------------------------------------------------X JOSEPH J. SARCONA, JR., a shareholder of JJS Index No. 614075/2021 TRANSPORTATION AND DISTRIBUTION CO., INC., suing in the right of JJS TRANSPORTATION Motion Sequence No. 4 AND DISTRIBUTION CO., INC., and JOSEPH J. SARCONA, JR., individually, Hon. Timothy S. Driscoll, J.S.C. Plaintiff, -against- JOSEPH J. SARCONA III, JJS TRANSPORTATION AND DISTRIBUTION CO., INC., JJS TRANSPORTATION AND DISTRIBUTION CO., INC. OF PA, JFM LOGISTICS MANAGEMENT, INC., and LEAR MANAGEMENT, INC., Defendants. -----------------------------------------------------------------X DEFENDANT JOSEPH J. SARCONA III’S MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF JOSEPH J. SARCONA, JR.’S MOTION FOR LEAVE TO AMEND THE COMPLAINT RIVKIN RADLER LLP 926 RXR Plaza Uniondale, New York 11556-0926 Telephone: (516) 357-3000 Facsimile: (516) 357-3333 Attorneys for Defendants Joseph J. Sarcona III Of Counsel: Brian L. Bank, Esq. 1 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 TABLE OF CONTENTS Page TABLE OF AUTHORITIES .........................................................Error! Bookmark not defined. PRELIMINARY STATEMENT .................................................................................................... 1 STATEMENT OF FACTS AND PROCEDURAL HISTORY...................................................... 2 STANDARD OF LAW................................................................................................................... 4 ARGUMENT .................................................................................................................................. 4 I. THE MOTION SHOULD BE DENIED DUE TO PLAINTIFF’S FAILURE TO TIMELY FILE A REDLINE PER N.Y. C.P.L.R. 3025(b) ................................................................ 4 II. PLAINTIFF’S MOTION MUST BE DENIED BECAUSE THE PROPOSED AMENDMENTS ARE PALPABLY INSUFFICIENT AND PATENTLY DEVOID OF MERIT ................................................................................................................................ 5 A. The Proposed Fourteenth Cause of Action for Breach of Fiduciary Duty Fails to State a Claim and is Precluded by Documentary Evidence ................................................ 5 B. The Proposed Fifteenth Cause of Action for an Accounting and Inspection of the Books and Record of JJS PA Fails to State a Claim .................................................. 8 C. The Proposed Amendment to the Thirteenth Cause of Action for Conversion Fails to State a Claim .............................................................................................................. 9 III. THE PROPOSED AMENDED COMPLAINT ASSERTS NO CAUSES OF ACTION AGAINST JFM OR LEAR ............................................................................................... 10 CONCLUSION ............................................................................................................................. 10 ATTORNEY CERTIFICATION .................................................................................................. 11 CERTIFICATION OF COMPLIANCE ....................................................................................... 11 i 2 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 TABLE OF AUTHORITIES Page(s) Cases 9310 Third Ave. Assocs., Inc. v. Schaffer Food Serv. Co., 210 A.D.2d 207, 620 N.Y.S.2d 255 (2d Dep’t 1994) ................................................................9 Adam v. Cutner & Rathkopf, 238 A.D.2d 234, 656 N.Y.S.2d 753 (1st Dep’t 1997) ...............................................................8 Aversano v. Macnamara, No. 07643/2010, 2010 N.Y. Misc. LEXIS 5461 (Sup. Ct. Suffolk Cnty. Oct. 27, 2010) ....................................................................................................................................7 Benjamin v. Yeroushalmi, 178 A.D.3d 650, 115 N.Y.S.3d 60 (2d Dep’t 2019) ..............................................................6, 8 Castellotti v. Free, 138 A.D.3d 198, 27 N.Y.S.3d 507 (1st Dep’t 2016) .................................................................9 Castillo v. Starrett City, Inc., 4 A.D.3d 320, 772 N.Y.S.2d 74 (2d Dep’t 2004) ......................................................................4 Dee v. Rakower, 112 A.D.3d 204, 976 N.Y.S.2d 470 (2d Dep’t 2013) ................................................................8 Dimich v. Med-Pro Inc., 34 A.D.3d 329, 826 N.Y.S.2d 3 (1st Dep’t 2006), appeal denied, 8 N.Y.3d 904, 834 N.Y.S.2d 76 (2007) .....................................................................................4 Jones v. LeFrance Leasing Ltd Partnership, 127 A.D.3d 819, 7 N.Y.S.3d 352 (2d Dep’t 2015) ....................................................................4 In re Kenneth Cole Productions, Inc., 27 N.Y.3d 268, 32 N.Y.S.3d 551 (2016) ...................................................................................6 Litvinoff v. Wright, 150 A.D.3d 714, 54 N.Y.S.3d 22 (2d Dep’t 2017) ....................................................................6 NHD Nigani, LLC v. Angelina Zabel Props., Inc., 161 A.D.3d 758, 77 N.Y.S.3d 78 (2d Dep’t 2018) ....................................................................4 Norman v. Ferrara, 107 A.D.2d 739, 484 N.Y.S.2d 600 (2d Dep’t 1985) ................................................................4 ii 3 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 Palazzo v. Palazzo, 121 A.D.2d 261, 503 N.Y.S.2d 381 (1st Dep’t 1986) ...............................................................8 Recine v. Soil Solutions, Inc., 63 A.D.3d 710, 879 N.Y.S.2d 338 (2d Dep’t 2009) ..................................................................9 SH575 Holdings LLC v. Reliable Abstract Co., L.L.C., 195 A.D.3d 429, 149 N.Y.S.3d 62 (1st Dep’t 2021) .................................................................9 Swartz v. Swartz, 145 A.D.3d 818, 44 N.Y.S.3d 452 (2d Dep’t 2016) ..................................................................6 Tsatskin v. Kordunsky, No. 521941/2017, 2018 N.Y. Misc. LEXIS 4879 (Sup. Ct. Kings Cnty. Oct. 19, 2018), aff’d, 189 A.D.3d 1296, 138 N.Y.S.3d 641 (2d Dep’t 2020) ...............................6, 8 Crucen ex rel. Vargas v. Leary, 55 A.D.3d 510, 867 N.Y.S.2d 49 (1st Dep’t 2008) ...................................................................4 Other Authorities N.Y. C.P.L.R. § 3016 (b) .............................................................................................................6, 7 N.Y. C.P.L.R. § 3019 ...................................................................................................................2, 3 N.Y. C.P.L.R. § 3025 .......................................................................................................................1 N.Y. C.P.L.R. § 3025(b) ......................................................................................................1, 3, 4, 5 23 N.Y. Jur. 2d, Conversion § 12, at 218.........................................................................................9 iii 4 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 PRELIMINARY STATEMENT Defendant Joseph J. Sarcona, III (“JS3”) respectfully submits this memorandum of law in opposition to Plaintiff Joseph J. Sarcona, Jr.’s (“Plaintiff”) motion pursuant to N.Y. C.P.L.R. 3025 for leave to amend his complaint (the “Motion”). Despite Plaintiff’s protestations that this action is moving far too slowly, Plaintiff nonetheless aids its unhurried pace with the Motion, which seeks to amend Plaintiff’s complaint for a second time, but which proffers only futile amendments that do not contribute to the progress of this litigation. As an initial matter, Plaintiff’s Motion is procedurally defective and should be denied. As the Court noted during the January 4, 2023 conference, the C.P.L.R. requires a party seeking leave to amend a pleading to attach “the proposed amended or supplemental pleading clearly showing the changes or additions to be made to the pleading.” N.Y. C.P.L.R. 3025(b). After Plaintiff failed to comply with this provision, the Court extended Plaintiff’s deadline to submit a redline of the proposed edits to January 13, 2023 – a deadline that Plaintiff failed to meet. Further, when Plaintiff finally did submit a redline of his proposed Amended Complaint, it did not show the proposed changes as against the operative pleading. The Court should deny Plaintiff’s Motion on this basis alone. Even if the Court were to consider the tardily filed redline of the proposed amended complaint, it should nonetheless deny the Motion on the ground that the proposed amendments are futile. Specifically, the proposed amended complaint purports to add two additional causes of action – (i) breach of fiduciary duty by JS3 to JJS Transportation & Distribution Co., Inc. (“JJS NY”) based on the formation of JJS Transportation & Distribution Co., Inc. (Pennsylvania) (“JJS PA”), and (ii) an accounting and inspection of the books and records of JJS PA – while also adding three paragraphs to the existing conversion claim. 1 5 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 With respect to the breach of fiduciary duty claim, Plaintiff’s proposed cause of action is palpably insufficient and patently devoid of merit. As demonstrated by documentary evidence, JS3 formed JJS PA at a time when he had no ownership interest in JJS NY. As such, JS3 owed no fiduciary duty to JJS NY at that time, thus precluding Plaintiff’s proposed cause of action. Furthermore, Plaintiff is not, and was never, a shareholder of JJS PA. Accordingly, Plaintiff lacks the right to demand an accounting of its records. Finally, to the extent that Plaintiff’s proposed amended complaint purports to assert the conversion cause of action as against JJS PA, that proposed amendment fails (along with the rest of that cause of action) because Plaintiff has failed to allege that the allegedly converted funds are specifically identifiable and subject to an obligation to be returned or to be otherwise treated in a particular manner. Since all of the causes of action that Plaintiff seeks to add to the complaint are futile, the Court should deny the Motion in its entirety. In addition, JS3 notes that in addition to JSS PA, Plaintiff’s proposed amended complaint purports to name JFM Logistics Management, Inc. (“JFM”) and Lear Management, Inc. (“Lear”) as defendants in this action. Since Plaintiff has not alleged any causes of action as against these entities – existing or proposed – these entities, along with JSS PA, should be dismissed as defendants in this action, to the extent that they were properly added as defendants to begin with. STATEMENT OF FACTS AND PROCEDURAL HISTORY On or about November 8, 2021, Plaintiff commenced this action by filing the original Summons and Complaint, which asserted thirteen causes of action against JS3 and/or JJS NY. See NYSCEF Doc. No. 1. On or about January 31, 2022, JS3 and JJS NY filed what was styled as a Summons to Additional Counterclaim Defendants Pursuant to CPLR § 3019 and a Verified Answer to Complaint with Counterclaims. See NYSCEF Doc. No. 45-46. The “Counterclaims” 2 6 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 consisted of seven causes of action against JS2 and what were styled as additional counterclaim defendants – Sarcona Management Inc. and nine other individuals. See NYSCEF Doc. No. 46 at ¶¶ 222-415. JS3 and JJS NY served the Summons to Additional Counterclaim Defendants Pursuant to CPLR § 3019 and Verified Answer to Complaint with Counterclaims on the ten additional counterclaim defendants. See NYSCEF Doc. No. 49, 50, 51, 59, 60, 61, 62, 63, 64, 65. On or about February 9, 2022, Plaintiff filed an Amended Summons and Amended Complaint purporting to add JJS PA, JFM, and Lear as defendants, but not asserting any causes of action as against those parties. See NYSCEF Doc. No. 48. On or about February 25, 2022, JS3 and JJS NY filed a Verified Answer to the Amended Complaint. See NYSCEF Doc. No. 75. Finally, on March 30, 2022, the counterclaim defendants (including JS2 and the ten additional counterclaim defendants) filed a Verified Answer to the Counterclaim and Third-Party Claim. See NYSCEF Doc. No. 92. Plaintiff brought the instant motion for leave to amend via notice of motion filed on or about October 10, 2022 and assigned as Motion Sequence No. 004. See NYSCEF Doc. No. 133. Plaintiff’s moving papers failed to include the requisite “proposed amended or supplemental pleading clearly showing the changes or additions to be made to the pleading.” N.Y. C.P.L.R. 3025(b). On January 4, 2023, during a conference before the Court, the Court directed (i) Plaintiff to file a redline of the proposed amended complaint by January 13, 2023, (ii) Defendants to file any opposition to the Motion by February 3, 2023, and (iii) Plaintiff to file any reply papers in further support of the Motion by February 10, 2023, with (iv) oral argument on the Motion to proceed on February 16, 2023 at 3:30 p.m. See Affirmation of Brian L. Bank, dated February 3, 2023 (“Bank Aff.”) at ¶ 4, Ex. A at 4:25-7:7. Despite the Court’s directive, Plaintiff waited until 3 7 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 January 19, 2023 – almost an entire week after it was due – to file a redline of the proposed amended complaint. See NYSCEF Doc. No. 171-172; Bank Aff. at ¶ 5. STANDARD OF LAW “Although leave to amend should be freely given in the absence of prejudice or surprise to the opposing party (see CPLR § 3025(b)), the motion should be denied where the proposed amendment is palpably insufficient or patently devoid of merit.” NHD Nigani, LLC v. Angelina Zabel Props., Inc., 161 A.D.3d 758, 761, 77 N.Y.S.3d 78, 81 (2d Dep’t 2018) (internal quotation marks and citation omitted); Jones v. LeFrance Leasing Ltd Partnership, 127 A.D.3d 819, 821, 7 N.Y.S.3d 352, 355 (2d Dep’t 2015). Where an amendment is wholly devoid of merit or is significantly prejudicial to the non-moving party, leave should be denied. See Norman v. Ferrara, 107 A.D.2d 739, 740, 484 N.Y.S.2d 600, 601 (2d Dep’t 1985). Put differently, leave to amend will be denied where the proposed amendment would be futile. See, e.g., Crucen ex rel. Vargas v. Leary, 55 A.D.3d 510, 512, 867 N.Y.S.2d 49, 51 (1st Dep’t 2008); Dimich v. Med-Pro Inc., 34 A.D.3d 329, 330, 826 N.Y.S.2d 3, 2 (1st Dep’t 2006), appeal denied, 8 N.Y.3d 904, 834 N.Y.S.2d 76 (2007); Castillo v. Starrett City, Inc., 4 A.D.3d 320, 322, 772 N.Y.S.2d 74 (2d Dep’t 2004). ARGUMENT I. THE MOTION SHOULD BE DENIED DUE TO PLAINTIFF’S FAILURE TO TIMELY FILE A REDLINE PER N.Y. C.P.L.R. 3025(b) In the first instance, the Court should deny Plaintiff’s motion for leave to amend due to Plaintiff’s own failure to comply with the Court’s briefing schedule for the Motion. As noted above, when Plaintiff filed the Motion back in October 2022, he failed to attach the requisite “proposed amended or supplemental pleading clearly showing the changes or additions to be made to the pleading” as required by N.Y. C.P.L.R. 3025(b). During the January 4, 2023 conference before the Court, the Court directed (i) Plaintiff to file a redline of the proposed amended complaint 4 8 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 by January 13, 2023, (ii) Defendants to file any opposition to the Motion by February 3, 2023, and (iii) Plaintiff to file any reply papers in further support of the Motion by February 10, 2023, with (iv) oral argument on the Motion to proceed on February 16, 2023 at 3:30 p.m. See Bank Aff. at ¶ 4, Ex. A at 4:25-7:7. Despite the Court’s directive, Plaintiff waited until January 19, 2023 – almost an entire week after it was due – to file a redline of the proposed amended complaint. See NYSCEF Doc. No. 171-172; Bank Aff. at ¶ 5. Further, the redline filed by Plaintiff on January 19, 2023 was based not off the February 9, 2022 Amended Complaint, which was the operative pleading throughout the pendency of the Motion, but rather on Plaintiff’s original Complaint. Compare NYSCEF Doc. No. 172 with NYSCEF Doc. No. 1, 48; see also NYSCEF Doc. No. 171 at ¶ 2. On this basis alone, the Court should deny Plaintiff’s Motion as noncompliant with N.Y. C.P.L.R. 3025(b). II. PLAINTIFF’S MOTION MUST BE DENIED BECAUSE THE PROPOSED AMENDMENTS ARE PALPABLY INSUFFICIENT AND PATENTLY DEVOID OF MERIT Even if the Court were inclined to consider Plaintiff’s defective Motion, which it should not, Plaintiff’s Motion nonetheless fails because each of his proposed amendments are palpably insufficient and devoid of merit. A. The Proposed Fourteenth Cause of Action for Breach of Fiduciary Duty Fails to State a Claim and is Precluded by Documentary Evidence Plaintiff’s proposed fourteenth cause of action alleges that JS3 breached his fiduciary duty to JJS NY based on his formation of JJS PA. According to the proposed Amended Complaint, “[JS3] formed JJS PA at some point after 2019. It is uncertain whether [Plaintiff] is or has ever been a shareholder in JJS PA.” See NYSCEF Doc. No. 172 at ¶ 12. The proposed Amended Complaint further alleges that “[JS3] violated his fiduciary duties to JJS NY by diverting assets to 5 9 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 JJS PA” and “[JS3] violated his fiduciary duties to JJS NY by depriving JJS NY of assets and diverting them to JJS PA.” NYSCEF Doc. No. 172 at ¶¶ 225-226. “The elements of a cause of action to recover damages for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant’s misconduct.” Litvinoff v. Wright, 150 A.D.3d 714, 715, 54 N.Y.S.3d 22, 24 (2d Dep’t 2017) (internal citations omitted). “‘A cause of action sounding in breach of fiduciary duty must be pleaded with particularity under CPLR 3016(b).’” Id. (quoting Swartz v. Swartz, 145 A.D.3d 818, 823, 44 N.Y.S.3d 452, 460 (2d Dep’t 2016)). “[B]are and conclusory allegations, without any supporting detail, [] fail[] to satisfy the requirements of CPLR 3016 (b).” Benjamin v. Yeroushalmi, 178 A.D.3d 650, 654, 115 N.Y.S.3d 60, 64 (2d Dep’t 2019). “CPLR § 3016 (b) is satisfied when the facts suffice to permit a ‘reasonable inference’ of the alleged misconduct.” Tsatskin v. Kordunsky, No. 521941/2017, 2018 N.Y. Misc. LEXIS 4879, at *5 (Sup. Ct. Kings Cnty. Oct. 19, 2018), aff’d, 189 A.D.3d 1296, 138 N.Y.S.3d 641 (2d Dep’t 2020). It is beyond dispute, however, that “[m]ere speculation cannot support a cause of action for breach of fiduciary duty.” Id. (quoting In re Kenneth Cole Productions, Inc., 27 N.Y.3d 268, 278, 32 N.Y.S.3d 551, 558 (2016)). Plaintiff’s proposed amendment fails for various reasons. First, to the extent that it is “based on [the] formation of JJS PA[,]” as stated in the cause of action header, NYSCEF Doc. No. 172 at 27, Plaintiff’s own allegations, we well as documentary evidence, preclude this claim because at the time JS3 formed JJS PA, he owed no fiduciary duty to JJS NY. Specifically, although Plaintiff loosely alleges that “[JS3] formed JJS PA at some point after 2019[,]” NYSCEF Doc. No. 172 at ¶ 12, a basic modicum of due diligence reveals that JS3 actually formed JJS PA on December 21, 2018. See Bank Aff. at ¶¶ 6-7; see also Affidavit of Joseph J. Sarcona III, dated 6 10 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 February 3, 2023 (“JS3 Aff.”), Ex. A. Notably, according to Plaintiff’s own pleading, prior to January 1, 2020, JS3 had no ownership interest in JJS NY, held no executive office with JJS NY, and did not serve as a director of JJS NY. See NYSCEF Doc. No. 172 at ¶¶ 35-37. Further, according to the proposed Amended Complaint, prior to January 1, 2020, JS3 lacked authority to take action on behalf of JJS NY and its day-to-day operations, or to act on behalf of JJS NY as to technical, operational, or financial matters. See NYSCEF Doc. No. 172 at ¶¶ 44-45. Those functions had been vested solely in JS2. See NYSCEF Doc. No. 172 at ¶ 46. Given that, according to the proposed Amended Complaint, JS3 was not an owner (majority or minority), officer, or director of JJS NY at the time of JJS PA’s formation, JS3 owed no fiduciary duty to JJS NY which JJS PA’s formation could have breached. See generally Aversano v. Macnamara, No. 07643/2010, 2010 N.Y. Misc. LEXIS 5461, at *5 (Sup. Ct. Suffolk Cnty. Oct. 27, 2010) (“As merely a minority shareholder, [defendant] was not a fiduciary and thus cannot be liable for breach of any fiduciary duty and the third cause of action must also be dismissed.”). Accordingly, Plaintiff’s proposed fourteenth cause of action – to the extent it is based upon JS3’s formation of JJS PA – is palpably insufficient and devoid of merit. To the extent that the proposed fourteenth cause of action is based upon JS3’s actions after the formation of JJS PA, that claim still fails because it lacks the particularity required by N.Y. C.P.L.R. 3016(b). Plaintiff’s proposed fourteenth cause of action alleges in conclusory fashion that “JJS PA was initially formed to run payroll for JJS NY” and “[JS3] formed JJS PA and made himself the sole shareholder[, thus] den[ying] [JS2] his rightful ownership in JJS PA [and] breach[ing] his fiduciary obligation to Joe Sarcona by not making him a shareholder in JJS PA.” NYSCEF Doc. No. 172 at ¶¶ 125-128. These assertions, however, cannot be reconciled with 7 11 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 Plaintiff’s allegation that, at the time, he, not JS3, controlled the technical, operational, and financial matters of JJS NY. See NYSCEF Doc. No. 172 at ¶ 46. Further, Plaintiff’s allegations that JS3 funneled assets to pay wages and benefits to himself, his wife, and other friends and family members are completely consistent with the notion that JJS PA runs payroll for JJS NY, which is a family-operated business. Compare NYSCEF Doc. No. 172 at ¶¶ 129-135 with NYSCEF Doc. No. 172 at ¶ 125. Simply put, Plaintiff’s proposed amendments constitute nothing more than inuendo and mere speculation, and fail to provide any factual detail as to any misconduct by JS3 that directly caused damage to JJS NY. As such, the proposed amendments fail to permit the requisite reasonable inference necessary to sustain Plaintiff’s proposed fourteenth cause of action. Benjamin, 178 A.D.3d at 654, 115 N.Y.S.3d at 64; Tsatskin, 2018 N.Y. Misc. LEXIS 4879, at *5. Finally, it bears note that the proposed fourteenth cause of action – alleging that JS3 breached his fiduciary duty to JJS NY – is wholly duplicative of the first cause of action, which asserts the very same claim. B. The Proposed Fifteenth Cause of Action for an Accounting and Inspection of the Books and Record of JJS PA Fails to State a Claim In his proposed fifteenth cause of action, Plaintiff seeks an accounting and inspection of the books and records of JJS PA. This proposed claim fails as a matter of law. “The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest.” Adam v. Cutner & Rathkopf, 238 A.D.2d 234, 242, 656 N.Y.S.2d 753, 759 (1st Dep’t 1997) (citing Palazzo v. Palazzo, 121 A.D.2d 261, 265, 503 N.Y.S.2d 381, 384 (1st Dep’t 1986)); see also Dee v. Rakower, 112 A.D.3d 204, 214, 976 N.Y.S.2d 470, 478 (2d Dep’t 2013). Claims for an accounting must be brought by a shareholder 8 12 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 on behalf of the corporation. See Recine v. Soil Solutions, Inc., 63 A.D.3d 710, 711, 879 N.Y.S.2d 338, 339 (2d Dep’t 2009) (finding former shareholder lacked standing to seek accounting); see also Castellotti v. Free, 138 A.D.3d 198, 210, 27 N.Y.S.3d 507, 518 (1st Dep’t 2016). In the proposed Amended Complaint, Plaintiff expressly alleges that “[JS3] formed JJS PA and made himself the sole shareholder.” NYSCEF Doc. No. 172 at ¶ 126; see also JS3 Aff. at ¶ 4. Since, by Plaintiff’s own admission, he is not a shareholder of JJS PA, Plaintiff lacks standing to demand an accounting and inspection of JJS PA’s books and records, and Plaintiff’s proposed fifteenth cause of action must be rejected as palpably insufficient and devoid of merit. Moreover, Plaintiff cannot seek an accounting with respect to JJS PA based upon a fiduciary relationship because, as noted above, there is no fiduciary relationship between Plaintiff and JS3 with respect to JJS PA. C. The Proposed Amendment to the Thirteenth Cause of Action for Conversion Fails to State a Claim To the extent that the proposed amendment adding three paragraphs to Plaintiff’s existing thirteenth cause of action for conversion are intended to assert that claim against JJS PA, Plaintiff’s proposed amendment in this regard fails and must be rejected. “Where a conversion claim is asserted with respect to money, the funds must be specifically identifiable and be subject to an obligation to be returned or to be otherwise treated in a particular manner.” SH575 Holdings LLC v. Reliable Abstract Co., L.L.C., 195 A.D.3d 429, 430, 149 N.Y.S.3d 62, 63 (1st Dep’t 2021). If “the allegedly converted money is incapable of being ‘described or identified in the same manner as a specific chattel,’ it is not the proper subject of a conversion action.” 9310 Third Ave. Assocs., Inc. v. Schaffer Food Serv. Co., 210 A.D.2d 207, 208, 620 N.Y.S.2d 255, 256 (2d Dep’t 1994) (quoting 23 N.Y. Jur. 2d, Conversion § 12, at 218). 9 13 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 Here, Plaintiff baldly alleges that “[JS3] has diverted funds from JJS NY to JJS PA[, t]his action was a conversion of JJS NY funds to JJS PA[, and t]his action was unlawful.” NYSCEF Doc. No. 172 at ¶¶ 219-221. Plaintiff makes no attempt to describe or otherwise identify the specific funds at issue as is required under New York law, further demonstrating Plaintiff’s strategy of pursuing baseless claims in a deliberate attempt to extend litigation and force JS3 to incur exorbitant expenses. As such, to the extent that the proposed amendments to the conversion claim are intended to assert that claim against JJS PA, the proposed amended cause of action fails as a matter of law. III. THE PROPOSED AMENDED COMPLAINT ASSERTS NO CAUSES OF ACTION AGAINST JFM OR LEAR As established above, Plaintiff has failed to plead any legally viable causes of action against JJS PA. Further, although the proposed Amended Complaint names JFM and Lear as defendants in this action, it is devoid of any causes of action asserted against those entities. Absent any viable causes of action asserted against JJS PA, JFM, and/or Lear, each of these parties should be dismissed from the action. CONCLUSION For all of the foregoing reasons, the Court should (i) deny Plaintiff’s motion pursuant to N.Y. C.P.L.R. 3025 for leave to amend the complaint, and (ii) award such other and further relief as the Court deems just and proper. Dated: Uniondale, New York Respectfully submitted, February 3, 2023 RIVKIN RADLER LLP /s/ Brian L. Bank Brian L. Bank 926 RXR Plaza Uniondale, New York 11556-0926 Telephone: (516) 357-3000 Attorneys for Defendant Joseph J. Sarcona III 10 14 of 15 FILED: NASSAU COUNTY CLERK 02/03/2023 03:37 PM INDEX NO. 614075/2021 NYSCEF DOC. NO. 181 RECEIVED NYSCEF: 02/03/2023 ATTORNEY CERTIFICATION To the best of my knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, the presentation and filing of the papers herein are not “frivolous,” as defined in subsection (c) of section 130-1.1 of NYCRR. Dated: Uniondale, New York February 3, 2023 /s/ Brian L. Bank Brian L. Bank, Esq. CERTIFICATION OF COMPLIANCE Pursuant to Section 202.8-b of the Uniform Civil Rules for the Supreme Court & the County Court, the undersigned attorney hereby certifies that the total number of words in the foregoing opposition memorandum of law, exclusive of the caption, table of contents, table of authorities, and signature block, is 3,230 according to the word-processing software used to prepare the reply memorandum of law. Dated: Uniondale, New York February 3, 2023 /s/ Brian L. Bank Brian L. Bank, Esq. 11 15 of 15