Preview
FILED: NASSAU COUNTY CLERK 05/04/2023 03:59 PM INDEX NO. 607197/2022
NYSCEF DOC. NO. 131 RECEIVED NYSCEF: 05/04/2023
EXHIBIT 8
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NYSCEF DOC. NO. 131
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
xxxxxx xxxxxx a/k/a xxxxxxxxxx
xxxxxx, individually and derivatively on Index No.: 607197/2022
behalf of ROCKVILLE CORP.,
Motion Seq. No. 003
Plaintiff,
Hon. Sharon M.J. Gianelli
-against-
xxxxxxx xxxxx, individually and as the
executor of the Estate of xxxx xxxxx, and as
co-trustee of the disclaimer Trust under
Article “Fourth” of the Last Will and
Testament of xxxx xxxxx; MAKAN
DELRAHIM, as former co-trustee of the
disclaimer Trust under Article “Fourth” of the
Last Will and Testament of xxxx xxxxx; and
BAHARAK AMIRIAN as co-trustee of the
disclaimer Trust under the Last Will and
Testament of xxxx xxxxx,
Defendants,
-and-
ROCKVILLE CORP.
Nominal Defendant.
MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ ORDER TO SHOW
CAUSE TO MODIFY PRELIMINARY INJUNCTION TO
REQUIRE POSTING OF UNDERTAKING
Counselors at Law
1425 RXR PLAZA
UNIONDALE, NEW YORK 11556-1425
——
(516) 663-6600
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TABLE OF CONTENTS
PAGE
TABLE OF AUTHORITIES .......................................................................................................... ii
PRELIMINARY STATEMENT .....................................................................................................1
RELEVANT FACTUAL AND PROCEDURAL HISTORY .........................................................4
ARGUMENT ...................................................................................................................................9
POINT I THE LAW OF THE CASE DOCTRINE BARS
DEFENDANTS’ MOTION .....................................................................................7
POINT II THE MOTION FAILS TO MEET THE THRESHOLD
STANDARD REQUIRED TO MODIFY A PRELIMINARY
INJUNCTION UNDER CPLR §6314 .....................................................................9
POINT III DEFENDANTS’ PROPOSED UNDERTAKING
IS NOT RATIONALLY RELATED TO ANY DAMAGES
DEFENDANTS MAY INCUR BECAUSE OF THE INJUNCTION ...................10
A. Any Purported Letter of Intent for the Purchase of the
Property Is Neither Binding Nor Enforceable ...........................................12
B. Defendants’ Market Argument Is Speculative And
Insufficient to Support an Undertaking......................................................13
CONCLUSION ..............................................................................................................................15
WORD COUNT CERTIFICATION .............................................................................................16
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TABLE OF AUTHORITIES
CASES PAGE
Arcamone-Makinano v. Britton Property, Inc.,
No. 329842009, 2010 WL 10817561, at *1 (Sup. Ct. NY Cnty 2010) ...........................................9
Blixt v. Eltoma Realty Co.,
138 A.D. 499, 501 (2d Dep’t 1910) ...............................................................................................14
Blueberries Gourmet, Inc. v. Aris Realty Corp.,
255 A.D.2d 348, 350 (2d Dep’t 1998) .............................................................................................8
Giorgio Armani Corp. v. SL Green Realty Corp.,
No. 651022/15, 2015 WL 4656523, at *5 (N.Y. Sup. Ct. Aug. 05, 2015) ....................................14
Hampton Valley Farms, Inc. v. Flower & Medalie,
40 A.D.3d 699, 701 (2d Dep’t 2007) ...............................................................................................7
Kalaj v. 21 Fountain Place, LLC,
169 A.D.3d 657, 658 (2d Dep’t 2019) ...........................................................................................12
Landau v. Assessor of Town of Carmel,
236 A.D.2d 403, 404 (2d Dep’t 1997) ...........................................................................................13
Lelekakis v. Kamamis,
303 A.D.2d 380, 381 (2d Dep’t 2003) ...........................................................................................10
Maestro W. Chelsea SPE LLC v. Pradera Realty Inc.,
38 Misc. 3d 522, 536, (Sup. Ct. N.Y. Cnty 2012) .........................................................................14
Martin v. City of Cohoes,
37 N.Y.2d 162, 165 (1975) ..............................................................................................................7
Matter of Leonardi,
72 Misc. 3d 1219(A) (N.Y. Sur. Queens Cnty 2021) ......................................................................9
Montana v. United States,
440 U.S. 147, 153–54 (1979) ...........................................................................................................8
Peyton v. PWV Acquisition LLC,
35 Misc. 3d 1207(A), 950 N.Y.S.2d 725 (Sup. Ct. N.Y. Cnty 2012),
aff'd, 101 A.D.3d 446 (1st Dep’t 2012) ....................................................................................11, 14
Piller v. Marsam Realty 13th Ave., LLC,
136 A.D.3d 773 (2d Dep’t 2016) ...................................................................................................12
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Purchase Real Est. Grp., Inc. v. Jones,
489 F. Supp. 2d 345, 349 (S.D.N.Y. 2007)....................................................................................13
Thompson v. 76 Corp.,
54 A.D.3d 844, 846 (2d Dep’t 2008) ...........................................................................................2, 9
Wellbilt Equip. Corp. v. Red Eye Grill, L.P.,
308 A.D.2d 411 (2d Dep’t 2003) .....................................................................................................9
Xander Corp. v. Haberman,
41 A.D.3d 489, 490–91 (2d Dep’t 2007) .........................................................................................9
STATUTES AND OTHER AUTHORITIES
CPLR §6312(b) ............................................................................................................................6, 7
CPLR §6314.................................................................................................................................2, 9
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This memorandum of law is respectfully submitted on behalf of plaintiff xxxxxx xxxxxx
a/k/a Nejatolla xxxxxx, individually and derivatively on behalf of Rockville Corp. (“Plaintiff” or
“xxxxxx”) in opposition the motion of defendants xxxxxxx xxxxx (“xxxxxxx”), Makan Delrahim
(“Delrahim”) and Baharak Amirian (“Amirian”, together with Delrahim and xxxxxxx, collectively
the “Defendants”) to modify this Court’s Decision and Order, dated September 27, 2022 (the
“Order”) (NYSCEF Doc. No. 59) so as to require Plaintiff to post an undertaking in the amount of
$2,596,000 (the “Motion”).
PRELIMINARY STATEMENT
In the simplest of terms, this case involves an intra-family dispute regarding the ownership
of Rockville Corp., the entity that holds title to commercial property located at 172 Sunrise
Highway, Rockville Centre, New York (the “Property”). Plaintiff commenced this action in which
he seeks, among other things, a judgment declaring him to be the 80% controlling-shareholder of
Rockville Corp. On account of that claim, and others set forth in his Complaint, Plaintiff obtained
a preliminary injunction enjoining the Defendants from taking any further steps to market and sell
the Property without Plaintiff’s consent, and to his exclusion (the “Injunction”). Defendants
opposed Plaintiff’s Injunction application arguing that xxxxxxx, who alleges that she is the
controlling shareholder of Rockville Corp., had the requisite authority to pursue a sale of the
Property with or without the consent of Plaintiff. After weighing the likelihood of success of the
parties’ respective claims, analyzing their sworn to statements, reviewing the documentary
evidence (including proof of the payments Plaintiff, and no defendant, has made towards the
Property over the past 25 years), and holding a two-plus hour oral argument on the Injunction
application, this Court granted Plaintiff the Injunction and issued the Order rejecting Defendants’
request for an undertaking.
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Nonetheless, xxxxxxx, who previously failed to persuade this Court of any need to impose
a bond on Plaintiff -- despite having ample opportunity to do so in opposition filings and during
the extensive oral argument held before Justice Gianelli on the return date of the Injunction
application -- now seeks a “second bite of the apple.” However, Defendants’ Motion must fail for
the same reasons the Court denied it in the first instance.
First, Defendants’ Motion is barred by the law of the case doctrine. Indeed, because the
Motion is not based on any new facts that were not available to xxxxxxx when she initially opposed
the Injunction and argued for the imposition of a bond, there is no reason to disturb the Order,
which is now law of the case.
Second, by way of their Motion, Defendants seek a modification or vacatur of the Order
pursuant to CPLR §6314. However, well-settled law mandates that any modification to a
preliminary injunction sought under CPLR §6314 must be based on “compelling or changed
circumstances that render the continuation of the injunction inequitable.” Thompson v. 76 Corp.,
54 A.D.3d 844, 846 (2d Dep’t 2008). Again, here, Defendants’ Motion is based on a regurgitation
of the same factual and legal arguments that were made when the Court granted the Injunction.
For that reason, the imposition of a bond is still not warranted.
Third, even assuming arguendo that Defendants’ Motion was premised on some change in
facts and circumstances or on an argument that this Court misapplied the law or facts such that a
modification of the Order is warranted under CPLR §6314, it still must fail. This is because the
undisputed factual record establishes that Plaintiff (and not a single defendant) has been, and still
is, the only party who has expended personal funds towards the purchase of the Property and who
has contributed his own personal funds to Rockville Corp. To add, it is Plaintiff (and not a single
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defendant) who has personally funded the carrying costs, maintenance of, and the improvements
made to the Property over the course of the past 25 years, which practice continues through today.
Here, with the Injunction in place, it is fair to conclude that the Property will not be sold
by Rockville Corp. until it is judicially determined which, or who of the captioned parties, has
authority to act on its behalf to effectuate such a sale. However, as is most critical here, because
Plaintiff is the only party who has ever been charged with paying the costs of the Property, and is,
to this day, the only party who has personally paid (and continues to personally pay) for all the
costs of carrying and maintaining the Property, Defendants have no basis to contend that they will
sustain a loss on account of the Property being “off the market” while the Injunction is in place.
Presumably understanding the flaws with Defendants’ request for this Court impose an
undertaking on the only party who pays (and has historically paid) the carrying costs of the
Property, Defendants are relegated to arguing that a bond is needed to protect xxxxxxx against a
“potential” “future” loss. That is, a loss xxxxxxx claims could be sustained on account of the
Injunction, if she is awarded an interest in Rockville Corp. (or the Property), and if the Property
were to lose value due to a downturn in the real estate market while the Injunction is in place.
xxxxxxx separately contends, without submitting any evidentiary support, that prior to the
Injunction, Rockville Corp. had procured a buyer that was willing to purchase the Property for
$2.2mm. It is from this unverified and uncorroborated offer that Defendants seemingly derive
their request for the Court to impose a bond in the amount of $2,596,000 (i.e. the $2.2mm “offer”
plus 2 years of statutory interest at 9%) on Plaintiff. Bluntly stated, the imposition of such an
undertaking, to wit, one in the amount that covers the full value of the Property, makes absolutely
no sense.
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Again, Defendants’ Motion in favor of a bond is exclusively based on a speculative
argument that the Property will lose value during the pendency of the Injunction, and that xxxxxxx
will personally sustain a loss on account of some speculative future market downturn if this Court
were to ultimately determine that she is a shareholder of Rockville Corp. By seeking a bond from
Plaintiff in the full amount of what she claims the Property was worth prior to the Injunction
($2.2mm), she is effectively contending that the Property (and her judicially determined interest
in same) will be worth zero when this case concludes and the Injunction is vacated. This is
nonsense. Indeed, this action, which was commenced to determine the rights and interests of the
parties to the Property, will have no impact on the global or local real-estate market or the value
of the Property. Much more, under well-settled law, a speculative claim that an enjoined property
will decrease in value due to unknowable future market conditions does not warrant an
undertaking.
Finally, the fact that Defendants seek a bond in the full amount of the Property’s value, in
lieu of one that would cover the costs of carrying the Property they wanted to sell before the
Injunction issued (i.e. which costs are the only quantifiable losses Rockville Corp. could possibly
incur on account of the Injunction), only serves to highlight their inability to articulate what the
Property’s ongoing carrying costs are. Why? Because, for the last 25 years up through today, those
costs have all been borne and paid by Plaintiff, exclusively. As such, xxxxxxx will not, and cannot,
sustain a loss that would warrant the imposition of a bond, much less one against Plaintiff who is
the only party funding the ongoing costs to carry the Property.
For these reasons, as detailed further below, this Court should deny xxxxxxx’s Motion in its
entirety.
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RELEVANT FACTUAL AND PROCEDURAL HISTORY
The material facts, which Plaintiff previously submitted to the Court in connection with his
Injunction application, are stated in the Verified Complaint, dated June 2, 2022 (the “Complaint”)
(NYSCEF Dckt No. 1); the Affidavit of xxxxxx xxxxxx, sworn to on May 31, 2022 (“xxxxxx
Moving Aff.”, NYSCEF Dckt. No. 3) with the exhibits annexed thereto; and the Affidavit of
xxxxxx xxxxxx, sworn to on June 15, 2022 (“xxxxxx Reply Aff.”) to which this Court is respectfully
referred. For the convenience of the Court, a brief recitation of the procedural history of this action
is set forth below.
On or about June 2, 2022, Plaintiff commenced this action by Summons and Complaint
and by Order to Show Cause (NYSCEF Dckt. Nos. 1, 2) seeking a temporary restraining order and
preliminary injunction relief enjoining and restraining defendants from, inter alia, taking any
further steps to market and sell the Property to Plaintiff’s exclusion and without his consent.
Plaintiff’s Complaint sets forth causes of action for breach of fiduciary duty, constructive
trust and permanent injunction against the defendants. In sum and substance, Plaintiff alleges that
he is an 80% shareholder of Rockville Corp., which holds title to the Property, and he is entitled
to a judicial declaration to that effect. With respect to his application for temporary and injunctive
relief, Plaintiff argued that defendants were illegally marketing the Property for sale, to his
exclusion, and in contravention of his 80% shareholder interest in the title holding entity, and
absent a restraining order or injunction, he would be irreparably harmed. Plaintiff submitted the
following sworn to facts in support of his claim that he is an 80% shareholder of Rockville Corp.
and for injunctive relief:
When Plaintiff formed Rockville Corp. with his brother xxxx (deceased) in or
around 1996, they agreed for Rockville Corp. to take title to the Property and that
Plaintiff would have an 80% shareholder interest and xxxx would maintain a 20%
shareholder interest in that entity. xxxxxx Moving Aff., ¶¶ 5-9.
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Plaintiff expended $65,000 in personal funds towards Rockville Corp.’s down
payment on the purchase of the Property; no monies were expended by the
defendants. Id. at ¶ 22.
Plaintiff personally funded hundreds of thousands of mortgage payments that came
due on the Property for the last 25 years; no monies were expended by defendants;
Id. at ¶¶ 23-33.
Plaintiff receives and handles all of Rockville Corp.’s correspondence and business
affairs (which he has done for the past 25 years) and is only party who has ever
been charged with making payments of real estate taxes and is the only party who
has grieved the assessment of those taxes. Id. at ¶¶ 52-53.
Defendants admitted in certain documents that they themselves authored and
circulated to Plaintiff during the parties’ failed buy-out negotiations (which were
engaged in prior to this action when no party was represented by counsel and no
action had been filed) that Plaintiff maintained an 80% shareholder interest in
Rockville and xxxxxxx maintained a 20% interest. xxxxxx Reply Aff., Exhibit I
(NYSCEF Dckt. No. 53).
On or about June 7, 2022, the Court granted Plaintiff a temporary restraining order
enjoining defendants from taking any further steps to market and sell the Property. The Court, in
its discretion, did not require Plaintiff to give an undertaking pursuant to CPLR §6312(c).
On or about June 13, 2022, defendants filed their opposition to Plaintiff’s application for
preliminary injunctive relief along with a cross-motion to dismiss the Complaint. In their
opposition to Plaintiff’s application for preliminary injunctive relief, Defendants argued that a
bond was not necessary since Plaintiff’s application was “fatally defective” but nonetheless posited
that if injunction were to issue, the Court should impose a bond in the amount of $2.2mm plus
statutory interest at 9% pursuant to CPLR §6312(b). (NYSCEF Dckt. No. 19, p. 17, fn. 4).
On or about June 15, 2022, Plaintiff filed his reply in further support of his application for
a preliminary injunction and in opposition to defendants’ motion to dismiss the Complaint.
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On or about June 16, 2022, this Court held a two-plus hour oral argument on Plaintiff’s
application for an injunction.
On or about September 27, 2022, this Court issued a decision and order granting Plaintiff’s
application for a preliminary injunction and denying defendants’ motion to dismiss the Complaint.
In connection therewith, this Court did not impose an undertaking on Plaintiff pursuant to CPLR
§6312(b) and rejected defendants’ argument that such an undertaking was warranted under the
circumstances.
On or about October 11, 2022, Defendants filed the Motion by Order to Show Cause and
submitted a duplicate copy of the affidavit xxxxxxx had already filed in opposition to the Injunction,
as support for the Motion. As such, there are no new facts presented by Defendants on the Motion
that were not presented in opposition to the Injunction, when the Court rejected the same relief
that is now requested, once again, by the Motion.
ARGUMENT
POINT I
THE LAW OF THE CASE DOCTRINE BARS DEFENDANTS’ MOTION
“The doctrine of the ‘law of the case’ is a rule of practice, an articulation of sound policy
that, when an issue is once judicially determined, that should be the end of the matter as far as
Judges and courts of co-ordinate jurisdiction are concerned.” Martin v. City of Cohoes, 37 N.Y.2d
162, 165 (1975) (citations omitted). The doctrine bars relitigation of issues “that have already been
determined at an earlier stage of the proceeding,” Hampton Valley Farms, Inc. v. Flower &
Medalie, 40 A.D.3d 699, 701 (2d Dep’t 2007). Precluding parties from contesting matters that they
have had a full and fair opportunity to litigate “protects their adversaries from the expense and
vexation attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial
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action by minimizing the possibility of inconsistent decisions.” Montana v. United States, 440 U.S.
147, 153–54 (1979).
The question of whether the Court should impose an undertaking on Plaintiff was ripe when
Plaintiff’s Injunction application was before the Court and sub judice. Defendants clearly
understood this and submitted arguments to that effect in their opposition papers, arguing (albeit,
in the same fashion that they argue on this Motion) that the imposition of a bond on Plaintiff in the
amount of $2.2mm is necessary because “plaintiff is attempting to block an all cash $2.2 million
sale of Rockville’s Property, and thus the bond would have to be at least in that amount plus interest
at 9% going forward.” (NYSCEF Dckt. No. 19, p. 17, fn. 4).1
Here, with the instant Motion, Defendants fail to submit any legal or factual arguments that
are in any way distinct from those that they submitted when this issue was ripe, and first briefed
by the parties. Indeed, the only “evidence” Defendants submit on this Motion is a duplicate copy
of the affidavit of xxxxxxx, sworn to on June 13, 2022, which they previously filed in opposition
to Plaintiff’s Injunction application. (Compare NYSCEF Doc. No. 23 with Doc. No. 68). Because
the Defendants, including xxxxxxx, had a full and fair opportunity to litigate the issue of an
injunction bond when that issue was sub judice, and because they already pursued the same factual
and legal arguments here, that they did during the prior proceedings that culminated in the Order,
there is no reason for the Court to revisit the issue or modify the Order. Furthermore, Defendants’
Motion is devoid of any arguments that the Court improvidently exercised its discretion in its
issuance of the Order, which is another fatal defect that plagues their ex-post facto request for a
bond. See e.g. Blueberries Gourmet, Inc. v. Aris Realty Corp., 255 A.D.2d 348, 350 (2d Dep’t
1998)( “The fixing of the amount of an undertaking is a matter within the sound discretion of the
1
Needless to say, the representation by Defendants’ counsel in his Affirmation that “No prior application has been
made for the relief requested herein” is not truthful.
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court, and its determination will not be disturbed absent an improvident exercise of that
discretion.”)
In re-submitting their same failed arguments now, the Defendants are simply attempting
re-litigate an issue that has already been considered and determined by the Court. Accordingly,
this Motion is barred by the law of the case and it should be denied in its entirety.
POINT II
THE MOTION FAILS TO MEET THE THRESHOLD STANDARD REQUIRED
TO MODIFY A PRELIMINARY INJUNCTION UNDER CPLR §6314
A motion to modify a preliminary injunction pursuant to CPLR §6314 “is addressed to the
sound discretion of the court and may be granted upon ‘compelling or changed circumstances that
render continuation of the injunction inequitable[.]’ ” Thompson v. 76 Corp., 54 A.D.3d 844, 846
(2d Dep’t 2008) (citing Wellbilt Equip. Corp. v. Red Eye Grill, L.P., 308 A.D.2d 411 [2d Dep’t
2003]); CPLR §6314); see also Xander Corp. v. Haberman, 41 A.D.3d 489, 490–91 (2d Dep’t
2007) (denying CPLR §6314 motion where defendants failed to show compelling or changed
circumstances). Modification of a preliminary injunction is improper where “[t]he contentions
presented merely seek to reargue previously determined issues.” Arcamone-Makinano v. Britton
Property, Inc., No. 329842009, 2010 WL 10817561, at *1 (Sup. Ct. NY Cnty 2010) (denying
defendants’ motion where they failed to “demonstrate circumstances which would warrant
modification of the preliminary injunction.”).
The Matter of Leonardi, 72 Misc. 3d 1219(A) (N.Y. Sur. Queens Cnty 2021) is especially
illustrative here. In that case, the respondents filed a motion, pursuant to CPLR §6314, to vacate
a restraining order in light of “historically low” interest rates available to refinance and improve
the subject property and their belief that the matter would ultimately be decided in their favor. Id.
The court in Leonardi held that neither respondents’ interest rate argument nor their “unwavering
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confidence in the strength of their case” argument were convincing to support the “compelling or
changed circumstances” standard. See Id.
By simply re-attaching the previously filed Affidavit of xxxxxxx xxxxx, sworn to on June
13, 2022 to this Motion, Defendants rely on the same exact set of facts they previously presented
in connection with Plaintiff’s motion for a preliminary injunction. As explained above, the Court
has already considered Defendants’ argument for an undertaking and decided that one is not
warranted under the facts of this case. With respect to the small handful of new arguments
submitted by Defendants’ counsel (in their memorandum of law, only) regarding their views on
the future state of the local commercial real estate market, such arguments are irrelevant,
speculative, not probative of anything and are otherwise insufficient to meet the “compelling”
standard because the market is constantly changing. See infra POINT III(B).
Based on the foregoing, Defendants’ Motion should be denied for failure to demonstrate
compelling or changed circumstances.
POINT III
DEFENDANTS’ PROPOSED UNDERTAKING IS NOT
RATIONALLY RELATED TO ANY DAMAGES DEFENDANTS
MAY INCUR BECAUSE OF THE INJUNCTION
Defendants’ contention that xxxxxxx will stand to lose $2,596,000, given (1) the existence
of a purported $2.2 million letter of intent she received from a prospective buyer for the Property;
and (2) the current state of the real estate and credit markets, is nonsensical and should not be
countenanced.
“[T]he amount of the undertaking must be rationally related to the amount of the
defendant’s potential liability if the preliminary injunction later proves to be unwarranted and not
based upon speculation.” Lelekakis v. Kamamis, 303 A.D.2d 380, 381 (2d Dep’t 2003) (citations
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omitted). “The amount of the undertaking must not be excessive, and the court must not consider
defendants’ speculative or conclusory claims of potential financial losses.” Peyton v. PWV
Acquisition LLC, 35 Misc. 3d 1207(A), 950 N.Y.S.2d 725 (Sup. Ct. N.Y. Cnty 2012), aff'd, 101
A.D.3d 446 (1st Dep’t 2012).
Here, the Defendants’ proposed undertaking in the full amount of the Property’s present
value -- as per a non-binding letter of intent they reference but do not even include with their
Motion – should be rejected. Additionally, this Court should take heed of the fact that Defendants
are unable to even articulate what “actual” costs may be incurred by Rockville Corp. or the
Property during the pendency of the Injunction. Again, this is because Defendants have never
sought to manage, operate, oversee or perform any business functions whatsoever related to the
Property during the past 25 years.2 Those responsibilities have been exclusively Plaintiff’s, and
are reflective of the parties understanding that Plaintiff has always maintained a controlling interest
(80%) in Rockville Corp. from the outset of its formation. Therefore, it comes as no surprise that
Defendants elected not to seek the imposition of an Injunction that is rationally related to costs that
may be incurred by Rockville Corp. Indeed, those are losses that Plaintiff bears and that he will
incur while the Injunction is in place, which is precisely why Defendants’ are without a basis to
impose a bond.
Put another way, any monies that have to be expended on Rockville Corp. because of the
Injunction and/or because the Property was not sold in accordance with Defendants’ alleged
2
Defendants’ lack of knowledge of the Property and of Rockville Corp.’s finances, as a whole, is further
evidenced by a 2019 letter xxxxxxx sent to Plaintiff asking him to provide certain financial documents to a
lender because she was not privy to such information. See Exhibit B to xxxxxx Reply Aff., ¶ 19 and Exhibit
B (NYSCEF Doc. Nos., 46). The irony of Defendants’ claim to a controlling shareholder interest in a
Property they know nothing about, and have not bothered to acquire knowledge of, over the course of the
past quarter-century, should not be lost on this Court.
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wishes, will be paid by Plaintiff. Plaintiff funded every mortgage payment, real estate tax payment,
and all improvement and maintenance costs that Rockville Corp. incurred over a 25-plus year span.
It makes no sense to impose a bond on Plaintiff under this set of facts, which are not in dispute.
Accordingly, and as detailed further below, this Court should deny Defendants’ Motion in
its entirety.
A. Any Purported Letter of Intent for the Purchase of the Property Is Neither
Binding Nor Enforceable
Defendant xxxxxxx xxxxx alleges, in conclusory fashion only, that her broker found a
“purchaser who has signed a Letter of Intent for an all-cash offer of $2.2 million,” “who is seeking
a quick closing[,]” and “is prepared to close on the Property, even subject to xxxxxx’s false
claims.” xxxxx Aff., ¶¶ 53-54. These conclusory statements are the sole and exclusive factual
support upon which Defendants intend to rely to impose a bond on Plaintiff in the amount of
$2,596,000. As such, Defendants’ Motion must fail.
“A mere agreement to agree, in which a material term is left for future negotiations, is
unenforceable[.]” Piller v. Marsam Realty 13th Ave., LLC, 136 A.D.3d 773 (2d Dep’t 2016)
(holding that letter of intent with prospective buyer for real property was neither valid nor
enforceable); see also Kalaj v. 21 Fountain Place, LLC, 169 A.D.3d 657, 658 (2d Dep’t 2019)
(holding that letter of intent with prospective buyer for real property was nonbinding and could
not be used as documentary evidence).
The purported Letter of Intent for a purchase price of $2,200,000 is neither binding nor
enforceable. Additionally, the credibility of, and weight that should be afforded to any “offer”
made by a prospective purchaser who is purportedly willing to pay $2.2mm for a Property that is
encumbered by this action, and cannot clear title without Plaintiff, as the 80% controlling
shareholder, agreeing to the sale, should be negligible .
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Notwithstanding the unenforceable nature of the Letter of Intent, there is no evidence
demonstrating that the $2.2 million purchase price was even negotiated in the course of an arms-
length transaction. See, e.g., Landau v. Assessor of Town of Carmel, 236 A.D.2d 403, 404 (2d
Dep’t 1997) (rejecting sale of real property as evidence of value because it “was not at arms’
length”). More importantly, there is no probative evidence that any formal agreement exists
beyond xxxxxxx’s hearsay statements regarding the non-binding Letter of Intent. See Purchase
Real Est. Grp., Inc. v. Jones, 489 F. Supp. 2d 345, 349 (S.D.N.Y. 2007) (considering the fact that
defendants offer no evidence that they have entered into any sort of formal agreement to sell the
Subject Property in connection with determining the amount of undertaking under New York law).
If that were not enough, there is also no evidence that the prospective purchaser (who has yet to
be even identified) was ready, willing and able to purchase the Property with $2.2 million in cash
available.
In fact, given the limited facts Defendants have supplied on this prospective “deal,” it
stands to reason that this “deal” could be something that was contrived by Defendants out of whole
cloth. It could also be the case the prospective purchaser (who Defendants do not identified) is an
insider or is someone with another disingenuous incentivize to sign off an a non-binding Letter of
Intent for Defendants’ benefit.
Based on the foregoing, the Letter of Intent allegedly reflecting a $2.2 million purchase
price should not be considered by the Court because it is non-binding and unenforceable and is
also hearsay given that it is not a part of the Court’s record on this Motion.
B. Defendants’ Market Argument Is Speculative And Insufficient to Support an
Undertaking
Defendants’ counsel asserts, in his memorandum of law only, that with current “widely-
publicized economic news[,]” the “Court knows” that “interest rates have increased sharply since
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early June 2022,” “credit markets have tightened,” and the “market for commercial property has
been negatively affected.” Defendants’ Br. at p. 6. These arguments are speculative and
insufficient to support an undertaking for several reasons.
First, this Court should refuse to take judicial notice of the current state of the real estate
market in relation to calculating damages because it is constantly changing. See Blixt v. Eltoma
Realty Co., 138 A.D. 499, 501 (2d Dep’t 1910) (“we cannot take judicial cognizance of the
Preview
FILED: NASSAU COUNTY CLERK 05/04/2023 03:59 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 RECEIVED NYSCEF: 05/04/2023 EXHIBIT 8 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU xxxxxx xxxxxx a/k/a xxxxxxxxxx xxxxxx, individually and derivatively on Index No.: 607197/2022 behalf of ROCKVILLE CORP., Motion Seq. No. 003 Plaintiff, Hon. Sharon M.J. Gianelli -against- xxxxxxx xxxxx, individually and as the executor of the Estate of xxxx xxxxx, and as co-trustee of the disclaimer Trust under Article “Fourth” of the Last Will and Testament of xxxx xxxxx; MAKAN DELRAHIM, as former co-trustee of the disclaimer Trust under Article “Fourth” of the Last Will and Testament of xxxx xxxxx; and BAHARAK AMIRIAN as co-trustee of the disclaimer Trust under the Last Will and Testament of xxxx xxxxx, Defendants, -and- ROCKVILLE CORP. Nominal Defendant. MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ ORDER TO SHOW CAUSE TO MODIFY PRELIMINARY INJUNCTION TO REQUIRE POSTING OF UNDERTAKING Counselors at Law 1425 RXR PLAZA UNIONDALE, NEW YORK 11556-1425 —— (516) 663-6600 1 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES .......................................................................................................... ii PRELIMINARY STATEMENT .....................................................................................................1 RELEVANT FACTUAL AND PROCEDURAL HISTORY .........................................................4 ARGUMENT ...................................................................................................................................9 POINT I THE LAW OF THE CASE DOCTRINE BARS DEFENDANTS’ MOTION .....................................................................................7 POINT II THE MOTION FAILS TO MEET THE THRESHOLD STANDARD REQUIRED TO MODIFY A PRELIMINARY INJUNCTION UNDER CPLR §6314 .....................................................................9 POINT III DEFENDANTS’ PROPOSED UNDERTAKING IS NOT RATIONALLY RELATED TO ANY DAMAGES DEFENDANTS MAY INCUR BECAUSE OF THE INJUNCTION ...................10 A. Any Purported Letter of Intent for the Purchase of the Property Is Neither Binding Nor Enforceable ...........................................12 B. Defendants’ Market Argument Is Speculative And Insufficient to Support an Undertaking......................................................13 CONCLUSION ..............................................................................................................................15 WORD COUNT CERTIFICATION .............................................................................................16 i 2 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 TABLE OF AUTHORITIES CASES PAGE Arcamone-Makinano v. Britton Property, Inc., No. 329842009, 2010 WL 10817561, at *1 (Sup. Ct. NY Cnty 2010) ...........................................9 Blixt v. Eltoma Realty Co., 138 A.D. 499, 501 (2d Dep’t 1910) ...............................................................................................14 Blueberries Gourmet, Inc. v. Aris Realty Corp., 255 A.D.2d 348, 350 (2d Dep’t 1998) .............................................................................................8 Giorgio Armani Corp. v. SL Green Realty Corp., No. 651022/15, 2015 WL 4656523, at *5 (N.Y. Sup. Ct. Aug. 05, 2015) ....................................14 Hampton Valley Farms, Inc. v. Flower & Medalie, 40 A.D.3d 699, 701 (2d Dep’t 2007) ...............................................................................................7 Kalaj v. 21 Fountain Place, LLC, 169 A.D.3d 657, 658 (2d Dep’t 2019) ...........................................................................................12 Landau v. Assessor of Town of Carmel, 236 A.D.2d 403, 404 (2d Dep’t 1997) ...........................................................................................13 Lelekakis v. Kamamis, 303 A.D.2d 380, 381 (2d Dep’t 2003) ...........................................................................................10 Maestro W. Chelsea SPE LLC v. Pradera Realty Inc., 38 Misc. 3d 522, 536, (Sup. Ct. N.Y. Cnty 2012) .........................................................................14 Martin v. City of Cohoes, 37 N.Y.2d 162, 165 (1975) ..............................................................................................................7 Matter of Leonardi, 72 Misc. 3d 1219(A) (N.Y. Sur. Queens Cnty 2021) ......................................................................9 Montana v. United States, 440 U.S. 147, 153–54 (1979) ...........................................................................................................8 Peyton v. PWV Acquisition LLC, 35 Misc. 3d 1207(A), 950 N.Y.S.2d 725 (Sup. Ct. N.Y. Cnty 2012), aff'd, 101 A.D.3d 446 (1st Dep’t 2012) ....................................................................................11, 14 Piller v. Marsam Realty 13th Ave., LLC, 136 A.D.3d 773 (2d Dep’t 2016) ...................................................................................................12 ii 3 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 Purchase Real Est. Grp., Inc. v. Jones, 489 F. Supp. 2d 345, 349 (S.D.N.Y. 2007)....................................................................................13 Thompson v. 76 Corp., 54 A.D.3d 844, 846 (2d Dep’t 2008) ...........................................................................................2, 9 Wellbilt Equip. Corp. v. Red Eye Grill, L.P., 308 A.D.2d 411 (2d Dep’t 2003) .....................................................................................................9 Xander Corp. v. Haberman, 41 A.D.3d 489, 490–91 (2d Dep’t 2007) .........................................................................................9 STATUTES AND OTHER AUTHORITIES CPLR §6312(b) ............................................................................................................................6, 7 CPLR §6314.................................................................................................................................2, 9 iii 4 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 This memorandum of law is respectfully submitted on behalf of plaintiff xxxxxx xxxxxx a/k/a Nejatolla xxxxxx, individually and derivatively on behalf of Rockville Corp. (“Plaintiff” or “xxxxxx”) in opposition the motion of defendants xxxxxxx xxxxx (“xxxxxxx”), Makan Delrahim (“Delrahim”) and Baharak Amirian (“Amirian”, together with Delrahim and xxxxxxx, collectively the “Defendants”) to modify this Court’s Decision and Order, dated September 27, 2022 (the “Order”) (NYSCEF Doc. No. 59) so as to require Plaintiff to post an undertaking in the amount of $2,596,000 (the “Motion”). PRELIMINARY STATEMENT In the simplest of terms, this case involves an intra-family dispute regarding the ownership of Rockville Corp., the entity that holds title to commercial property located at 172 Sunrise Highway, Rockville Centre, New York (the “Property”). Plaintiff commenced this action in which he seeks, among other things, a judgment declaring him to be the 80% controlling-shareholder of Rockville Corp. On account of that claim, and others set forth in his Complaint, Plaintiff obtained a preliminary injunction enjoining the Defendants from taking any further steps to market and sell the Property without Plaintiff’s consent, and to his exclusion (the “Injunction”). Defendants opposed Plaintiff’s Injunction application arguing that xxxxxxx, who alleges that she is the controlling shareholder of Rockville Corp., had the requisite authority to pursue a sale of the Property with or without the consent of Plaintiff. After weighing the likelihood of success of the parties’ respective claims, analyzing their sworn to statements, reviewing the documentary evidence (including proof of the payments Plaintiff, and no defendant, has made towards the Property over the past 25 years), and holding a two-plus hour oral argument on the Injunction application, this Court granted Plaintiff the Injunction and issued the Order rejecting Defendants’ request for an undertaking. 1 5 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 Nonetheless, xxxxxxx, who previously failed to persuade this Court of any need to impose a bond on Plaintiff -- despite having ample opportunity to do so in opposition filings and during the extensive oral argument held before Justice Gianelli on the return date of the Injunction application -- now seeks a “second bite of the apple.” However, Defendants’ Motion must fail for the same reasons the Court denied it in the first instance. First, Defendants’ Motion is barred by the law of the case doctrine. Indeed, because the Motion is not based on any new facts that were not available to xxxxxxx when she initially opposed the Injunction and argued for the imposition of a bond, there is no reason to disturb the Order, which is now law of the case. Second, by way of their Motion, Defendants seek a modification or vacatur of the Order pursuant to CPLR §6314. However, well-settled law mandates that any modification to a preliminary injunction sought under CPLR §6314 must be based on “compelling or changed circumstances that render the continuation of the injunction inequitable.” Thompson v. 76 Corp., 54 A.D.3d 844, 846 (2d Dep’t 2008). Again, here, Defendants’ Motion is based on a regurgitation of the same factual and legal arguments that were made when the Court granted the Injunction. For that reason, the imposition of a bond is still not warranted. Third, even assuming arguendo that Defendants’ Motion was premised on some change in facts and circumstances or on an argument that this Court misapplied the law or facts such that a modification of the Order is warranted under CPLR §6314, it still must fail. This is because the undisputed factual record establishes that Plaintiff (and not a single defendant) has been, and still is, the only party who has expended personal funds towards the purchase of the Property and who has contributed his own personal funds to Rockville Corp. To add, it is Plaintiff (and not a single 2 6 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 defendant) who has personally funded the carrying costs, maintenance of, and the improvements made to the Property over the course of the past 25 years, which practice continues through today. Here, with the Injunction in place, it is fair to conclude that the Property will not be sold by Rockville Corp. until it is judicially determined which, or who of the captioned parties, has authority to act on its behalf to effectuate such a sale. However, as is most critical here, because Plaintiff is the only party who has ever been charged with paying the costs of the Property, and is, to this day, the only party who has personally paid (and continues to personally pay) for all the costs of carrying and maintaining the Property, Defendants have no basis to contend that they will sustain a loss on account of the Property being “off the market” while the Injunction is in place. Presumably understanding the flaws with Defendants’ request for this Court impose an undertaking on the only party who pays (and has historically paid) the carrying costs of the Property, Defendants are relegated to arguing that a bond is needed to protect xxxxxxx against a “potential” “future” loss. That is, a loss xxxxxxx claims could be sustained on account of the Injunction, if she is awarded an interest in Rockville Corp. (or the Property), and if the Property were to lose value due to a downturn in the real estate market while the Injunction is in place. xxxxxxx separately contends, without submitting any evidentiary support, that prior to the Injunction, Rockville Corp. had procured a buyer that was willing to purchase the Property for $2.2mm. It is from this unverified and uncorroborated offer that Defendants seemingly derive their request for the Court to impose a bond in the amount of $2,596,000 (i.e. the $2.2mm “offer” plus 2 years of statutory interest at 9%) on Plaintiff. Bluntly stated, the imposition of such an undertaking, to wit, one in the amount that covers the full value of the Property, makes absolutely no sense. 3 7 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 Again, Defendants’ Motion in favor of a bond is exclusively based on a speculative argument that the Property will lose value during the pendency of the Injunction, and that xxxxxxx will personally sustain a loss on account of some speculative future market downturn if this Court were to ultimately determine that she is a shareholder of Rockville Corp. By seeking a bond from Plaintiff in the full amount of what she claims the Property was worth prior to the Injunction ($2.2mm), she is effectively contending that the Property (and her judicially determined interest in same) will be worth zero when this case concludes and the Injunction is vacated. This is nonsense. Indeed, this action, which was commenced to determine the rights and interests of the parties to the Property, will have no impact on the global or local real-estate market or the value of the Property. Much more, under well-settled law, a speculative claim that an enjoined property will decrease in value due to unknowable future market conditions does not warrant an undertaking. Finally, the fact that Defendants seek a bond in the full amount of the Property’s value, in lieu of one that would cover the costs of carrying the Property they wanted to sell before the Injunction issued (i.e. which costs are the only quantifiable losses Rockville Corp. could possibly incur on account of the Injunction), only serves to highlight their inability to articulate what the Property’s ongoing carrying costs are. Why? Because, for the last 25 years up through today, those costs have all been borne and paid by Plaintiff, exclusively. As such, xxxxxxx will not, and cannot, sustain a loss that would warrant the imposition of a bond, much less one against Plaintiff who is the only party funding the ongoing costs to carry the Property. For these reasons, as detailed further below, this Court should deny xxxxxxx’s Motion in its entirety. 4 8 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 RELEVANT FACTUAL AND PROCEDURAL HISTORY The material facts, which Plaintiff previously submitted to the Court in connection with his Injunction application, are stated in the Verified Complaint, dated June 2, 2022 (the “Complaint”) (NYSCEF Dckt No. 1); the Affidavit of xxxxxx xxxxxx, sworn to on May 31, 2022 (“xxxxxx Moving Aff.”, NYSCEF Dckt. No. 3) with the exhibits annexed thereto; and the Affidavit of xxxxxx xxxxxx, sworn to on June 15, 2022 (“xxxxxx Reply Aff.”) to which this Court is respectfully referred. For the convenience of the Court, a brief recitation of the procedural history of this action is set forth below. On or about June 2, 2022, Plaintiff commenced this action by Summons and Complaint and by Order to Show Cause (NYSCEF Dckt. Nos. 1, 2) seeking a temporary restraining order and preliminary injunction relief enjoining and restraining defendants from, inter alia, taking any further steps to market and sell the Property to Plaintiff’s exclusion and without his consent. Plaintiff’s Complaint sets forth causes of action for breach of fiduciary duty, constructive trust and permanent injunction against the defendants. In sum and substance, Plaintiff alleges that he is an 80% shareholder of Rockville Corp., which holds title to the Property, and he is entitled to a judicial declaration to that effect. With respect to his application for temporary and injunctive relief, Plaintiff argued that defendants were illegally marketing the Property for sale, to his exclusion, and in contravention of his 80% shareholder interest in the title holding entity, and absent a restraining order or injunction, he would be irreparably harmed. Plaintiff submitted the following sworn to facts in support of his claim that he is an 80% shareholder of Rockville Corp. and for injunctive relief: When Plaintiff formed Rockville Corp. with his brother xxxx (deceased) in or around 1996, they agreed for Rockville Corp. to take title to the Property and that Plaintiff would have an 80% shareholder interest and xxxx would maintain a 20% shareholder interest in that entity. xxxxxx Moving Aff., ¶¶ 5-9. 5 9 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 Plaintiff expended $65,000 in personal funds towards Rockville Corp.’s down payment on the purchase of the Property; no monies were expended by the defendants. Id. at ¶ 22. Plaintiff personally funded hundreds of thousands of mortgage payments that came due on the Property for the last 25 years; no monies were expended by defendants; Id. at ¶¶ 23-33. Plaintiff receives and handles all of Rockville Corp.’s correspondence and business affairs (which he has done for the past 25 years) and is only party who has ever been charged with making payments of real estate taxes and is the only party who has grieved the assessment of those taxes. Id. at ¶¶ 52-53. Defendants admitted in certain documents that they themselves authored and circulated to Plaintiff during the parties’ failed buy-out negotiations (which were engaged in prior to this action when no party was represented by counsel and no action had been filed) that Plaintiff maintained an 80% shareholder interest in Rockville and xxxxxxx maintained a 20% interest. xxxxxx Reply Aff., Exhibit I (NYSCEF Dckt. No. 53). On or about June 7, 2022, the Court granted Plaintiff a temporary restraining order enjoining defendants from taking any further steps to market and sell the Property. The Court, in its discretion, did not require Plaintiff to give an undertaking pursuant to CPLR §6312(c). On or about June 13, 2022, defendants filed their opposition to Plaintiff’s application for preliminary injunctive relief along with a cross-motion to dismiss the Complaint. In their opposition to Plaintiff’s application for preliminary injunctive relief, Defendants argued that a bond was not necessary since Plaintiff’s application was “fatally defective” but nonetheless posited that if injunction were to issue, the Court should impose a bond in the amount of $2.2mm plus statutory interest at 9% pursuant to CPLR §6312(b). (NYSCEF Dckt. No. 19, p. 17, fn. 4). On or about June 15, 2022, Plaintiff filed his reply in further support of his application for a preliminary injunction and in opposition to defendants’ motion to dismiss the Complaint. 6 10 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 On or about June 16, 2022, this Court held a two-plus hour oral argument on Plaintiff’s application for an injunction. On or about September 27, 2022, this Court issued a decision and order granting Plaintiff’s application for a preliminary injunction and denying defendants’ motion to dismiss the Complaint. In connection therewith, this Court did not impose an undertaking on Plaintiff pursuant to CPLR §6312(b) and rejected defendants’ argument that such an undertaking was warranted under the circumstances. On or about October 11, 2022, Defendants filed the Motion by Order to Show Cause and submitted a duplicate copy of the affidavit xxxxxxx had already filed in opposition to the Injunction, as support for the Motion. As such, there are no new facts presented by Defendants on the Motion that were not presented in opposition to the Injunction, when the Court rejected the same relief that is now requested, once again, by the Motion. ARGUMENT POINT I THE LAW OF THE CASE DOCTRINE BARS DEFENDANTS’ MOTION “The doctrine of the ‘law of the case’ is a rule of practice, an articulation of sound policy that, when an issue is once judicially determined, that should be the end of the matter as far as Judges and courts of co-ordinate jurisdiction are concerned.” Martin v. City of Cohoes, 37 N.Y.2d 162, 165 (1975) (citations omitted). The doctrine bars relitigation of issues “that have already been determined at an earlier stage of the proceeding,” Hampton Valley Farms, Inc. v. Flower & Medalie, 40 A.D.3d 699, 701 (2d Dep’t 2007). Precluding parties from contesting matters that they have had a full and fair opportunity to litigate “protects their adversaries from the expense and vexation attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial 7 11 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 action by minimizing the possibility of inconsistent decisions.” Montana v. United States, 440 U.S. 147, 153–54 (1979). The question of whether the Court should impose an undertaking on Plaintiff was ripe when Plaintiff’s Injunction application was before the Court and sub judice. Defendants clearly understood this and submitted arguments to that effect in their opposition papers, arguing (albeit, in the same fashion that they argue on this Motion) that the imposition of a bond on Plaintiff in the amount of $2.2mm is necessary because “plaintiff is attempting to block an all cash $2.2 million sale of Rockville’s Property, and thus the bond would have to be at least in that amount plus interest at 9% going forward.” (NYSCEF Dckt. No. 19, p. 17, fn. 4).1 Here, with the instant Motion, Defendants fail to submit any legal or factual arguments that are in any way distinct from those that they submitted when this issue was ripe, and first briefed by the parties. Indeed, the only “evidence” Defendants submit on this Motion is a duplicate copy of the affidavit of xxxxxxx, sworn to on June 13, 2022, which they previously filed in opposition to Plaintiff’s Injunction application. (Compare NYSCEF Doc. No. 23 with Doc. No. 68). Because the Defendants, including xxxxxxx, had a full and fair opportunity to litigate the issue of an injunction bond when that issue was sub judice, and because they already pursued the same factual and legal arguments here, that they did during the prior proceedings that culminated in the Order, there is no reason for the Court to revisit the issue or modify the Order. Furthermore, Defendants’ Motion is devoid of any arguments that the Court improvidently exercised its discretion in its issuance of the Order, which is another fatal defect that plagues their ex-post facto request for a bond. See e.g. Blueberries Gourmet, Inc. v. Aris Realty Corp., 255 A.D.2d 348, 350 (2d Dep’t 1998)( “The fixing of the amount of an undertaking is a matter within the sound discretion of the 1 Needless to say, the representation by Defendants’ counsel in his Affirmation that “No prior application has been made for the relief requested herein” is not truthful. 8 12 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 court, and its determination will not be disturbed absent an improvident exercise of that discretion.”) In re-submitting their same failed arguments now, the Defendants are simply attempting re-litigate an issue that has already been considered and determined by the Court. Accordingly, this Motion is barred by the law of the case and it should be denied in its entirety. POINT II THE MOTION FAILS TO MEET THE THRESHOLD STANDARD REQUIRED TO MODIFY A PRELIMINARY INJUNCTION UNDER CPLR §6314 A motion to modify a preliminary injunction pursuant to CPLR §6314 “is addressed to the sound discretion of the court and may be granted upon ‘compelling or changed circumstances that render continuation of the injunction inequitable[.]’ ” Thompson v. 76 Corp., 54 A.D.3d 844, 846 (2d Dep’t 2008) (citing Wellbilt Equip. Corp. v. Red Eye Grill, L.P., 308 A.D.2d 411 [2d Dep’t 2003]); CPLR §6314); see also Xander Corp. v. Haberman, 41 A.D.3d 489, 490–91 (2d Dep’t 2007) (denying CPLR §6314 motion where defendants failed to show compelling or changed circumstances). Modification of a preliminary injunction is improper where “[t]he contentions presented merely seek to reargue previously determined issues.” Arcamone-Makinano v. Britton Property, Inc., No. 329842009, 2010 WL 10817561, at *1 (Sup. Ct. NY Cnty 2010) (denying defendants’ motion where they failed to “demonstrate circumstances which would warrant modification of the preliminary injunction.”). The Matter of Leonardi, 72 Misc. 3d 1219(A) (N.Y. Sur. Queens Cnty 2021) is especially illustrative here. In that case, the respondents filed a motion, pursuant to CPLR §6314, to vacate a restraining order in light of “historically low” interest rates available to refinance and improve the subject property and their belief that the matter would ultimately be decided in their favor. Id. The court in Leonardi held that neither respondents’ interest rate argument nor their “unwavering 9 13 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 confidence in the strength of their case” argument were convincing to support the “compelling or changed circumstances” standard. See Id. By simply re-attaching the previously filed Affidavit of xxxxxxx xxxxx, sworn to on June 13, 2022 to this Motion, Defendants rely on the same exact set of facts they previously presented in connection with Plaintiff’s motion for a preliminary injunction. As explained above, the Court has already considered Defendants’ argument for an undertaking and decided that one is not warranted under the facts of this case. With respect to the small handful of new arguments submitted by Defendants’ counsel (in their memorandum of law, only) regarding their views on the future state of the local commercial real estate market, such arguments are irrelevant, speculative, not probative of anything and are otherwise insufficient to meet the “compelling” standard because the market is constantly changing. See infra POINT III(B). Based on the foregoing, Defendants’ Motion should be denied for failure to demonstrate compelling or changed circumstances. POINT III DEFENDANTS’ PROPOSED UNDERTAKING IS NOT RATIONALLY RELATED TO ANY DAMAGES DEFENDANTS MAY INCUR BECAUSE OF THE INJUNCTION Defendants’ contention that xxxxxxx will stand to lose $2,596,000, given (1) the existence of a purported $2.2 million letter of intent she received from a prospective buyer for the Property; and (2) the current state of the real estate and credit markets, is nonsensical and should not be countenanced. “[T]he amount of the undertaking must be rationally related to the amount of the defendant’s potential liability if the preliminary injunction later proves to be unwarranted and not based upon speculation.” Lelekakis v. Kamamis, 303 A.D.2d 380, 381 (2d Dep’t 2003) (citations 10 14 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 omitted). “The amount of the undertaking must not be excessive, and the court must not consider defendants’ speculative or conclusory claims of potential financial losses.” Peyton v. PWV Acquisition LLC, 35 Misc. 3d 1207(A), 950 N.Y.S.2d 725 (Sup. Ct. N.Y. Cnty 2012), aff'd, 101 A.D.3d 446 (1st Dep’t 2012). Here, the Defendants’ proposed undertaking in the full amount of the Property’s present value -- as per a non-binding letter of intent they reference but do not even include with their Motion – should be rejected. Additionally, this Court should take heed of the fact that Defendants are unable to even articulate what “actual” costs may be incurred by Rockville Corp. or the Property during the pendency of the Injunction. Again, this is because Defendants have never sought to manage, operate, oversee or perform any business functions whatsoever related to the Property during the past 25 years.2 Those responsibilities have been exclusively Plaintiff’s, and are reflective of the parties understanding that Plaintiff has always maintained a controlling interest (80%) in Rockville Corp. from the outset of its formation. Therefore, it comes as no surprise that Defendants elected not to seek the imposition of an Injunction that is rationally related to costs that may be incurred by Rockville Corp. Indeed, those are losses that Plaintiff bears and that he will incur while the Injunction is in place, which is precisely why Defendants’ are without a basis to impose a bond. Put another way, any monies that have to be expended on Rockville Corp. because of the Injunction and/or because the Property was not sold in accordance with Defendants’ alleged 2 Defendants’ lack of knowledge of the Property and of Rockville Corp.’s finances, as a whole, is further evidenced by a 2019 letter xxxxxxx sent to Plaintiff asking him to provide certain financial documents to a lender because she was not privy to such information. See Exhibit B to xxxxxx Reply Aff., ¶ 19 and Exhibit B (NYSCEF Doc. Nos., 46). The irony of Defendants’ claim to a controlling shareholder interest in a Property they know nothing about, and have not bothered to acquire knowledge of, over the course of the past quarter-century, should not be lost on this Court. 11 15 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 wishes, will be paid by Plaintiff. Plaintiff funded every mortgage payment, real estate tax payment, and all improvement and maintenance costs that Rockville Corp. incurred over a 25-plus year span. It makes no sense to impose a bond on Plaintiff under this set of facts, which are not in dispute. Accordingly, and as detailed further below, this Court should deny Defendants’ Motion in its entirety. A. Any Purported Letter of Intent for the Purchase of the Property Is Neither Binding Nor Enforceable Defendant xxxxxxx xxxxx alleges, in conclusory fashion only, that her broker found a “purchaser who has signed a Letter of Intent for an all-cash offer of $2.2 million,” “who is seeking a quick closing[,]” and “is prepared to close on the Property, even subject to xxxxxx’s false claims.” xxxxx Aff., ¶¶ 53-54. These conclusory statements are the sole and exclusive factual support upon which Defendants intend to rely to impose a bond on Plaintiff in the amount of $2,596,000. As such, Defendants’ Motion must fail. “A mere agreement to agree, in which a material term is left for future negotiations, is unenforceable[.]” Piller v. Marsam Realty 13th Ave., LLC, 136 A.D.3d 773 (2d Dep’t 2016) (holding that letter of intent with prospective buyer for real property was neither valid nor enforceable); see also Kalaj v. 21 Fountain Place, LLC, 169 A.D.3d 657, 658 (2d Dep’t 2019) (holding that letter of intent with prospective buyer for real property was nonbinding and could not be used as documentary evidence). The purported Letter of Intent for a purchase price of $2,200,000 is neither binding nor enforceable. Additionally, the credibility of, and weight that should be afforded to any “offer” made by a prospective purchaser who is purportedly willing to pay $2.2mm for a Property that is encumbered by this action, and cannot clear title without Plaintiff, as the 80% controlling shareholder, agreeing to the sale, should be negligible . 12 16 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 Notwithstanding the unenforceable nature of the Letter of Intent, there is no evidence demonstrating that the $2.2 million purchase price was even negotiated in the course of an arms- length transaction. See, e.g., Landau v. Assessor of Town of Carmel, 236 A.D.2d 403, 404 (2d Dep’t 1997) (rejecting sale of real property as evidence of value because it “was not at arms’ length”). More importantly, there is no probative evidence that any formal agreement exists beyond xxxxxxx’s hearsay statements regarding the non-binding Letter of Intent. See Purchase Real Est. Grp., Inc. v. Jones, 489 F. Supp. 2d 345, 349 (S.D.N.Y. 2007) (considering the fact that defendants offer no evidence that they have entered into any sort of formal agreement to sell the Subject Property in connection with determining the amount of undertaking under New York law). If that were not enough, there is also no evidence that the prospective purchaser (who has yet to be even identified) was ready, willing and able to purchase the Property with $2.2 million in cash available. In fact, given the limited facts Defendants have supplied on this prospective “deal,” it stands to reason that this “deal” could be something that was contrived by Defendants out of whole cloth. It could also be the case the prospective purchaser (who Defendants do not identified) is an insider or is someone with another disingenuous incentivize to sign off an a non-binding Letter of Intent for Defendants’ benefit. Based on the foregoing, the Letter of Intent allegedly reflecting a $2.2 million purchase price should not be considered by the Court because it is non-binding and unenforceable and is also hearsay given that it is not a part of the Court’s record on this Motion. B. Defendants’ Market Argument Is Speculative And Insufficient to Support an Undertaking Defendants’ counsel asserts, in his memorandum of law only, that with current “widely- publicized economic news[,]” the “Court knows” that “interest rates have increased sharply since 13 17 of 20 FILED: NASSAU COUNTY CLERK 05/04/2023 10/31/2022 03:59 03:24 PM INDEX NO. 607197/2022 NYSCEF DOC. NO. 131 77 RECEIVED NYSCEF: 05/04/2023 10/31/2022 early June 2022,” “credit markets have tightened,” and the “market for commercial property has been negatively affected.” Defendants’ Br. at p. 6. These arguments are speculative and insufficient to support an undertaking for several reasons. First, this Court should refuse to take judicial notice of the current state of the real estate market in relation to calculating damages because it is constantly changing. See Blixt v. Eltoma Realty Co., 138 A.D. 499, 501 (2d Dep’t 1910) (“we cannot take judicial cognizance of the