Preview
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
Supreme Court of the State of New York
County of Nassau
------------------------------------------------------------------x
THOMAS F. LIOTTI, an individual,
Plaintiff,
-against- Nassau County Index No. 606200/2020
ATLANTIC BEACH CLUB, lNC., Motion Seq. No. 25
A Membership Corporation, Justice Gretchen Walsh
Defendant.
------------------------------------------------------------------x
REPLY AND SUPPLEMENTAL MEMO OF LAW
In support of emergency relief and motion for reargument
Note: All authorities and docket numbers are hyperlinked.
1
1 of 10
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
I. Overview
As Plaintiff Thomas F. Liotti (Tom) has informed the Court by letter, he was unlawfully
evicted by on or about 5/20/2023 by Defendant Atlantic Beach Club, Inc. (Club) from Cabana
D-9. NYSCEF Doc. No. 657 dated 5/26/2023. The Club used self-help unlawfully.
Tom has also filed a motion by Order to Show Cause (OTSC), to reargue the
Decision/Order, NYSCEF Doc. No. 627, seeking its recall and vacatur.
The Club filed an affirmation in opposition. NYSCEF Doc. No. 651. The term
“license agreement” is referred to in ¶¶ 2, 3 therein. The license agreement itself is found at
NYSCEF Doc No. 601.
The Court, in the conformed OTSC provided the Club with an additional opportunity
to respond by midnight on 5/26/2023. NYSCEF Doc. No. 655. No submission was filed.
Tom was given until 4:00PM on 5/31/2023 to make the instant submission as a reply memo in
Tom’s motion for reargument.
On a threshold basis, the Club by its unlawful eviction denied Tom due process of law
as codified in RPAPL § 713. The statute requires 10 days written notice and a special
proceeding before a licensee can be lawfully removed from possession of real property.
Said licensee status was terminated by a sealed Order. NYSCEF Doc. No. 646.1 (
If a licensee seeks permission to appeal the Order ending his license, the application of
RPAPL § 713 is automatically stayed under CPLR 5519(a)(6). Tom sought such permission
by his OTSC and stated he is ready, willing and able to tender the requisite undertaking.
If the automatic stay of CPLR 5519(a)(6) should be ruled inapplicable, the Court has
discretionary authority under CPLR 5519(c) and CPLR 2201 to grant a stay from the effect of
its Order terminating Tom’s license. NYSCEF Doc. No. 646 (sealed).
Tom is also seeking to reargue his motion to re-argue for vacatur of a Negotiated
Settlement Agreement (NSA) between the parties. NYSCEF Doc. No. 644. If granted, this
would restore the parties to the status quo ante when this Article 78 proceeding commenced in
2020 mandating that Tom be restored to possession of Cabana D-9.
The grounds for re-argument are:
(i) The Defendant Club failed to pay the requisite fee to and file the NSA with the
Clerk of Nassau County as required by CPLR 2104. Non-compliance, under binding
precedent, makes the NSA non-binding on the parties.
1 Tom in the instant motion is seeking reargument and permission to appeal that Order.
2
2 of 10
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
(ii) Absent the NSA, Tom should be restored to full membership status in the Club
as existed when this case was commenced in 2020 and which was continued by stays granted
by Justices Cozzens and Walsh.
(iii) The Club lacked legal capacity to contract and appear in this Court because its
Certificate of Incorporation (COI) is defective;
II. Emergency relief.
The Club has taken the position that the license it granted to Tom for exclusive
possession of Cabana D-9 has expired.
Said license expiration triggers RPAPL§ 713(7) that requires the Club to serve Tom
with a ten-day notice to quit and then commence a special proceeding to secure a warrant of
eviction to be executed by a Sheriff.
A special proceeding may be maintained under this article after a ten-day
notice to quit has been served upon the respondent in the manner prescribed
in section 735, upon the following grounds:
7. He is a licensee of the person entitled to possession of the property at the
time of the license, and (a) his license has expired, [Emphasis added.]
RPAPL § 713
There are 3 statutes that control staying said special proceeding while Tom appeals the
Order that terminated the stay that allowed Tom to remain in possession.
The first, CPLR 5519(a)(6), provides an automatic stay of a proceeding:
§ 5519. Stay of enforcement. (a) Stay without court order. Service
upon the adverse party of a notice of appeal or an affidavit of
intention to move for permission to appeal stays all proceedings to
enforce the judgment or order appealed from pending the appeal or
determination on the motion for permission to appeal where:
6. the appellant or moving party is in possession or control of real property
which the judgment or order directs be conveyed or delivered, and an
undertaking in a sum fixed by the court or original instance is given that the
appellant or moving party will not commit or suffer to be committed any waste
and that if the judgment or order appealed from, or any part of it, is affirmed,
or the appeal is dismissed, the appellant or moving party shall pay the value of
the use and occupancy of such property, or the part of it as to which the
judgment or order is affirmed, from the taking of the appeal until the delivery
of possession of the property;
CPLR § 5519(a)
3
3 of 10
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
Tom respectfully requests that the Court fix the amount of the undertaking and direct
to whom he should tender same. Tom is willing and able to tender the entire annual rental
amount for Cabana D-9 thereby fully protecting the Club’s economic rights.
“Nonetheless, the property owner's rights are adequately protected, since the
court entertaining the application is duty-bound to consider the relative
hardships that would result from granting (or denying) a stay (see, Siegel,
Practice Commentaries, op. cit., C5519:4, at 188).”
Da Silva v. Musso, 76 N.Y.2d 436, 443(1990)
Second, the Court has the discretion to issue a stay under CPLR 5519(c):
(c) Stay and Limitation of Stay by Court Order. The court from or to which an
appeal is taken or the court of original instance may stay all proceedings to
enforce the judgment or order appealed from pending an appeal or
determination on a motion for permission to appeal in a case not provided
for in subdivision (a) or subdivision (b), or may grant a limited stay or may
vacate, limit or modify any stay imposed by subdivision (a), subdivision (b) or
this subdivision, [Emphasis added.]
CPLR § 5519
The third is CPLR § 2201.
“Except where otherwise prescribed by law, the court in which an action is
pending may grant a stay of proceedings in a proper case, upon such terms as
may be just.”
The Club challenges Tom to justify his request for a stay. NYSCEF Doc No. 653,
Opp. Br., pp. 5-6. It lists 3 criteria.
1. A likelihood of success on the merits. As the Club lacks legal capacity and
because of its indisputable failure to file the 20-page NSA, and pay the filing fee thereby
making it non-binding on him, it is likely that Tom will prevail.
2. The prospect of irreparable injury if the provisional relief is withheld. Tom and
his wife Wendy will miss out socializing with their friends built up over 39 years of continual
membership in the Club and the continuation of a family tradition of summers at the beach for
their 3 children.
3. A balance of the equities. Tom and Wendy are 1 of 530 Members. They have
never been charged with any wrongdoing in 39 years. As they are willing to continue to pay
full rent for their cabana (and even spending money in the dining room, if permitted) the Club’s
4
4 of 10
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
economic rights are adequately protected; it stands to suffer not a penny of economic loss. Tom
and Wendy will lose their lifelong relationships with friends.
“For a discretionary stay, a court may consider "any relevant factor, including
the presumptive merits of the appeal and any exigency
or hardship confronting any party." (Richard C. Reilly, Practice Commentaries,
McKinney's Cons. Laws of NY, CPLR C5519:4, Court Ordered Stay.)”
Tax Equity Now NY LLC v City of New York, 2018 N.Y. Misc. LEXIS 5727, *7 (NY
Sup., NY Cty, 2008) [J. Lebovits]
The Club also argues that a stay cannot be granted because no action is pending.
NYSCEF DOC No. 653, Opp. Br., p. 6. The Court has imposed a return date of June 1st for
the instant motion. This fact gainsays that argument.
Further, the Club argues that a stay can be granted only when “such relief is essential
to maintain the status quo pending trial of the action.” Id. This is precisely what Tom seeks
in view of the possible proceeding under RPAPL § 713
The Club by its citation to Moody v. Filipowski, 146 A.D.2d 675, 675 (2nd Dept. 1989]
is helpful to Tom. Id. A stay will preserve the status quo ante until a decision is reached on
the merits absent the constraint of the NSA that is not binding on the parties for lack of its filing
as explained supra.
The Club relies on the NSA and License Agreement as grounds against the invocation
of Tom’s rights under CPLR 5519(a)(6). NYSCEF Doc. No 653, Opp. Br., p. 6. and Fn 3,
p. 10. Based on determination that the NSA is not binding because the Club failed to file and
pay a fee to file the NSA as required by CPLR 2104, the Club’s reliance on these agreements
is misplaced.
To sum up, Tom is entitled to: (i) be restored to possession after his unlawful eviction;
(ii) 10 days notice; (iii) a special proceeding under RPAPL § 713; (iv) the opportunity to be
heard in said proceeding; and assert counterclaims for damages, and, (v) a stay of said
proceeding by posting an undertaking.
Tom respectfully requests that any RPAPL § 713 proceeding, be commenced in this
Court that unlike the Housing Court has jurisdiction to entertain Tom’s counterclaim for
compensatory and punitive damages for the Club’s illegal eviction of him and a jury trial.
III. The Club lacks legal capacity as its certificate of incorporation is defective.
As the Club cannot contradict the admissible documentary evidence of its COI, it
shamelessly tries to mislead the Court as to its contents.
5
5 of 10
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
+2. Plaintiff argues ABC was not validly incorporated because its Certificate of
Incorporation purportedly has only four subscribers rather than the required
five. But, the certified records of the Secretary of State (see Ex. "A") shows that
there were five subscribers: Eugene Tuck, Edward Osterman, Saul Gerber,
Edward Alexander and Anna Wilfan.”
NYSCEF Doc. No. 627, Affidavit of John P. McEntee
Under close scrutiny, the COI reveals, instead of the five (5) typewritten names and five
(5) handwritten signatures of subscribers required by the then governing statute, Membership
Corporation Law (MCL) § 10, there are only four (4) typewritten names and of those only
three (3) inscribed their handwritten signatures on the COI. NYSCEF Doc No. 610, last page.
Typewritten names and addresses Handwritten names
Eugene Tuck Eugene Tuck
8 Grace Court
Brooklyn NY
Edward G. Osterman
390 Riverside Drive
New York, NY
Saul Gerber Saul Gerber
1423 President Street
Brooklyn, NY
Edward D. Alexander Edward D. Alexander
104 East 57th Street
Brooklyn, NY
Note: There is an additional handwritten name, Anna Wilfand. However, without her address
in the typewritten list, she is an ineligible substitute who may have “walked in from the street.”
The MCL, § 10, ¶ 6. requires the address of all subscribers. NYSCEF Doc. No. 611. The
purported signature of Osterman is speculated in sealed NYSCEF DOC No. 646 to be “faded.”
Why would only one signature fade. It could just as well have been deliberately erased.
As membership corporations are not part of the common law, a strict interpretation of
the MCL is required.
“…a statute in derogation of the common law must be strictly construed (see,
Sherman v Robinson, 80 NY2d 483, 487; [***825] D'Amico v Christie, 71 NY2d
76, 83)”
Rust v. Reyer, 91 N.Y.2d 355, 360 (1998)
6
6 of 10
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
The above deviations are fatal to any pretense of legal capacity for the Club to even
appear in this Court.
The need for deception palpably practiced by the founding subscribers of the Club is
explained by the circumstances of its creation in May of 1933. Prohibition had been in effect
for 13+ years with no assurance that it would ever end. Bon vivants were looking at a 14th
“dry” summer. The use of the MCL to organize a not-for-profit corporation of wealthy
members to whom spirits could be resold profitably was a very attractive option. It meant no
taxes on profits and no scrutiny by federal or state income tax agencies.
The Club’s Members were a potentially large consumer of alcoholic spirits. But where
to obtain them? Bootleggers had freighters anchored 3 miles offshore from the Club beyond
the State’s regulatory powers. The most famous of which were owned by a man named Bill
McCoy (McCoy) who had a reputation as a supplier of spirits that were not watered down.
Hence the expression “the real McCoy.” The Court is requested to take judicial notice of an
article about McCoy in Wikipedia. William McCoy (rum runner) - Wikipedia.
Speedboats, manufactured in nearby Freeport, L. I., could traffic the coveted spirits
under cover of darkness from the freighters to the beachfront of the Club. As a private club it
was safe from the peering eyes of the public. The historical reason for the Club’s construction
of the cabanas was to enable the Members to sleep off their intoxication.
Given these murky circumstances it is understandable why there may have been
difficulty in getting the required number of responsible parties to subscribe to the certificate of
incorporation for what may have been a “cover” to circumvent the laws of the United States
and avoid scrutiny by the IRS as well as the New York Department of Taxation and Finance.
Not to mention the prospect of a possible criminal conspiracy charge for trying to evade the
Prohibition statutes and regulations.
A threshold impediment to the plan was that under the MCL § 10, a Justice of the
Supreme Court (JSC) had to approve the bona fides of all subscribers to form a not-for-profit
corporation. NYSCEF DOC No. 611. A temptation was therefore present to submit one list of
placeholder names with a good reputation to a JSC and then switch subscribers’ names in the
COI submitted to the NYDOS.
In the case cited to in Plaintiff’s brief, NYSCEF Doc No 634, p. 9, the Supreme Court
in Albany County revoked an incorporation because there was a difference in the names listed
on the application to the JSC that he approved and the names on the certificate filed with the
NYDOS. People v. Smith, 121 Misc. 338 (N. Y. Sup. Ct, 1923) [Albany Cty., J. Staley]. The
7
7 of 10
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
penalty imposed by J. Staley was to “perpetually restrain the commission of the acts
complained of and a temporary injunction to restrain such acts….”
The Club’s subscribers plainly engaged in wrongdoing by not strictly adhering to MCL
§ 10, in its formation in 1933. Altering instruments and filing same with a public office
destroys their integrity. This wrong cannot be continued by this Court.
“It would be contrary to the legal [*393] principle to permit a wrongdoer to
benefit from his own wrong and would [***5] be contrary to the public policy
of the State.”
Utica Teachers Credit Union v. Ayers, 54 Misc. 2d 391, 392-393 (Utica City Ct.,
1967)
"The ancient equitable adage that 'one may not benefit from his own wrong'
still survives and will be applied to achieve the ends of justice." 1202 Realty
Association v Evans, 126 Misc 2d 99, 101, 481 N.Y.S.2d 208 (Civ Ct, NY County
1984) [**6] .
Haberman v Singer, 2002 N.Y. Misc. LEXIS 2034, *5 (NY Sup, NY Cty, 2002)
It is noteworthy that on the stationery of the Club its founding year is listed as 1939.
NYSCEF Doc No. 28. The year 1933 appears on its COI. NYSCEF Doc No. 610. It is
apparent that the Directors of the Club would rather forget its beginnings. This is an indicia of
guilt. It also explains why the Club is anxious to have the Clerk seal records from its Members
and the public. NYSCEF Doc No. 653, Op. Memo, Fn 1, p. 5.
The bottom line is that absent a proper COI, the Club lacks legal capacity to appear in
this Court. A receiver needs to be appointed so that this litigation can continue.
Meanwhile Tom can provide rental income for the receiver to administer.
IV. The Negotiated Settlement Agreement is not binding on the parties.
The NSA’s 20 pages was not filed with the Nassau County Clerk at any time in 2022
by the Club. Only a 1-page, 2¶ stipulation was filed, NYSCEF Doc No. 575, on 1/5/2022. It
did not include “the terms of such stipulation” as CPLR 2104 requires in relevant part:
“With respect to stipulations of settlement and notwithstanding the
form of the stipulation of settlement, the terms of such stipulation shall be
filed by the defendant with the county clerk.” [Emphasis added.]
Without filing it can be inferred that the required $35 fee was not paid.
“With respect to stipulations of settlement and notwithstanding [*4] the form
of the stipulation [**3] of settlement, the terms of such stipulation shall be
filed by the defendant with the county clerk." The commentary on that section
8
8 of 10
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
of the CPLR notes that "CPLR 2104 was amended in 2003 to provide "[w]ith
respect to stipulations of settlement and notwithstanding the form of the
stipulation of settlement, the terms of such stipulation shall be filed by the
defendant with the county clerk." At the same time, CPLR 8020 was amended
to require the defendant to pay the County Clerk $35 with the filing. The
legislative history of these amendments makes clear that their purpose was to
generate revenue, with the settlement filing fee enacted along with several
other filing fee measures. (See, e.g., CPLR 3217[d]; CPLR 8020[a], [d])
{Emphasis added.]
Fisher v Stone, 2020 N.Y. Misc. LEXIS 2512, *3-5 (Sup. Ct., NY Cty 2020) [J.
Sherwood]
The NSA is therefore not binding upon the parties. All of the Club’s arguments that
are grounded in the NSA must be discarded and all of Tom’s arguments must be reconsidered
de novo, unencumbered by the NSA.
Tom informed the Court by his affidavit that he was promised a vested membership
with lifetime renewal rights by former Club president Edward Danks and Directors Paul Conte
and John Scaduto in return for lending the Club in October 1988, after its Clubhouse burned
down, a substantial sum of money in return for a promissory note, with no interest, and an
indefinite repayment date. NYSCEF DOC No. 580. See, note at NYSCEF Doc. No. 582. The
Club has enjoyed this interest free loan for 35 years.
The Club has never contradicted Tom’s assertion of vested membership. It only
asserted that he waived this argument in the NSA. With the negativing of the NSA, the vested
membership status of Tom must be given legal effect based on the weight of evidence.
Any argument by the Club that its bylaws enacted in 2020 provided the right to not
invite Tom to renew his membership must be rejected as new bylaws cannot “divest rights
which have vested” and “destroy the contract rights of its members.”
“It must be deemed to be now established that, even though the right is
reserved to the association to amend and change its by-laws, and although the
by laws are said to form part of the contract between the association and its
members, yet there is no power in the association to so amend its by-laws as
to divest rights which have vested, however broad may be [***6] its power
as to matters of administration. Within the rules laid down it must be held
that no amendment to the by-laws of an association of this character can be
made operative to divest rights which have already vested in the members.
( Farmers' Loan & Trust Co. v. Aberle, 19 A.D. 79; cited with approval
in Parish v. New York Produce Exchange, 169 N.Y. 34, 49.) The court in
the Parish Case (supra) say: "These cases, as we understand them, establish a
principle which we deem well supported in reason, that the power of a
9
9 of 10
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020
NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023
corporation such as this one to amend its by-laws is a power to regulate within
reasonable bounds, not a power to destroy the contract rights of its
members." (Pp. 50, 51.)” [Emphasis added.]
Williams v. Supreme Council, 80 A.D. 402, 404 (2nd Dept., 1903)
V. Conclusion
WHEREFORE, Tom respectfully seeks reargument of sealed Decision/Order NYSCEF
DOC No. 646, its recall and vacatur; restoration of the prior stays and an Order immediately
restoring possession of Cabana D-9. If not granted, Tom seeks to be protected by RPAPL §
713, restored to possession of Cabana D-9 and await the requisite 10-day notice, and an
eventual hearing; and, upon the granting of permission to appeal No. 646; a stay under CPLR
5519(a)(6) or CPLR 5519(c); or CPLR 2201 of any further proceeding. Tom respectfully seeks
such other and further relief as this Court deems just.
Garden City, NY
May 31, 2023
Respectfully submitted,
/s Thomas F. Liotti
Thomas F. Liotti, appearing pro se
600 Old Country Road
Garden City, NY 11530
516 794-3700
Tlottiesq.@gmail.com
According to the software used to prepare this document there are 3,454 words in its body.
10
10 of 10
Preview
FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 Supreme Court of the State of New York County of Nassau ------------------------------------------------------------------x THOMAS F. LIOTTI, an individual, Plaintiff, -against- Nassau County Index No. 606200/2020 ATLANTIC BEACH CLUB, lNC., Motion Seq. No. 25 A Membership Corporation, Justice Gretchen Walsh Defendant. ------------------------------------------------------------------x REPLY AND SUPPLEMENTAL MEMO OF LAW In support of emergency relief and motion for reargument Note: All authorities and docket numbers are hyperlinked. 1 1 of 10 FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 I. Overview As Plaintiff Thomas F. Liotti (Tom) has informed the Court by letter, he was unlawfully evicted by on or about 5/20/2023 by Defendant Atlantic Beach Club, Inc. (Club) from Cabana D-9. NYSCEF Doc. No. 657 dated 5/26/2023. The Club used self-help unlawfully. Tom has also filed a motion by Order to Show Cause (OTSC), to reargue the Decision/Order, NYSCEF Doc. No. 627, seeking its recall and vacatur. The Club filed an affirmation in opposition. NYSCEF Doc. No. 651. The term “license agreement” is referred to in ¶¶ 2, 3 therein. The license agreement itself is found at NYSCEF Doc No. 601. The Court, in the conformed OTSC provided the Club with an additional opportunity to respond by midnight on 5/26/2023. NYSCEF Doc. No. 655. No submission was filed. Tom was given until 4:00PM on 5/31/2023 to make the instant submission as a reply memo in Tom’s motion for reargument. On a threshold basis, the Club by its unlawful eviction denied Tom due process of law as codified in RPAPL § 713. The statute requires 10 days written notice and a special proceeding before a licensee can be lawfully removed from possession of real property. Said licensee status was terminated by a sealed Order. NYSCEF Doc. No. 646.1 ( If a licensee seeks permission to appeal the Order ending his license, the application of RPAPL § 713 is automatically stayed under CPLR 5519(a)(6). Tom sought such permission by his OTSC and stated he is ready, willing and able to tender the requisite undertaking. If the automatic stay of CPLR 5519(a)(6) should be ruled inapplicable, the Court has discretionary authority under CPLR 5519(c) and CPLR 2201 to grant a stay from the effect of its Order terminating Tom’s license. NYSCEF Doc. No. 646 (sealed). Tom is also seeking to reargue his motion to re-argue for vacatur of a Negotiated Settlement Agreement (NSA) between the parties. NYSCEF Doc. No. 644. If granted, this would restore the parties to the status quo ante when this Article 78 proceeding commenced in 2020 mandating that Tom be restored to possession of Cabana D-9. The grounds for re-argument are: (i) The Defendant Club failed to pay the requisite fee to and file the NSA with the Clerk of Nassau County as required by CPLR 2104. Non-compliance, under binding precedent, makes the NSA non-binding on the parties. 1 Tom in the instant motion is seeking reargument and permission to appeal that Order. 2 2 of 10 FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 (ii) Absent the NSA, Tom should be restored to full membership status in the Club as existed when this case was commenced in 2020 and which was continued by stays granted by Justices Cozzens and Walsh. (iii) The Club lacked legal capacity to contract and appear in this Court because its Certificate of Incorporation (COI) is defective; II. Emergency relief. The Club has taken the position that the license it granted to Tom for exclusive possession of Cabana D-9 has expired. Said license expiration triggers RPAPL§ 713(7) that requires the Club to serve Tom with a ten-day notice to quit and then commence a special proceeding to secure a warrant of eviction to be executed by a Sheriff. A special proceeding may be maintained under this article after a ten-day notice to quit has been served upon the respondent in the manner prescribed in section 735, upon the following grounds: 7. He is a licensee of the person entitled to possession of the property at the time of the license, and (a) his license has expired, [Emphasis added.] RPAPL § 713 There are 3 statutes that control staying said special proceeding while Tom appeals the Order that terminated the stay that allowed Tom to remain in possession. The first, CPLR 5519(a)(6), provides an automatic stay of a proceeding: § 5519. Stay of enforcement. (a) Stay without court order. Service upon the adverse party of a notice of appeal or an affidavit of intention to move for permission to appeal stays all proceedings to enforce the judgment or order appealed from pending the appeal or determination on the motion for permission to appeal where: 6. the appellant or moving party is in possession or control of real property which the judgment or order directs be conveyed or delivered, and an undertaking in a sum fixed by the court or original instance is given that the appellant or moving party will not commit or suffer to be committed any waste and that if the judgment or order appealed from, or any part of it, is affirmed, or the appeal is dismissed, the appellant or moving party shall pay the value of the use and occupancy of such property, or the part of it as to which the judgment or order is affirmed, from the taking of the appeal until the delivery of possession of the property; CPLR § 5519(a) 3 3 of 10 FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 Tom respectfully requests that the Court fix the amount of the undertaking and direct to whom he should tender same. Tom is willing and able to tender the entire annual rental amount for Cabana D-9 thereby fully protecting the Club’s economic rights. “Nonetheless, the property owner's rights are adequately protected, since the court entertaining the application is duty-bound to consider the relative hardships that would result from granting (or denying) a stay (see, Siegel, Practice Commentaries, op. cit., C5519:4, at 188).” Da Silva v. Musso, 76 N.Y.2d 436, 443(1990) Second, the Court has the discretion to issue a stay under CPLR 5519(c): (c) Stay and Limitation of Stay by Court Order. The court from or to which an appeal is taken or the court of original instance may stay all proceedings to enforce the judgment or order appealed from pending an appeal or determination on a motion for permission to appeal in a case not provided for in subdivision (a) or subdivision (b), or may grant a limited stay or may vacate, limit or modify any stay imposed by subdivision (a), subdivision (b) or this subdivision, [Emphasis added.] CPLR § 5519 The third is CPLR § 2201. “Except where otherwise prescribed by law, the court in which an action is pending may grant a stay of proceedings in a proper case, upon such terms as may be just.” The Club challenges Tom to justify his request for a stay. NYSCEF Doc No. 653, Opp. Br., pp. 5-6. It lists 3 criteria. 1. A likelihood of success on the merits. As the Club lacks legal capacity and because of its indisputable failure to file the 20-page NSA, and pay the filing fee thereby making it non-binding on him, it is likely that Tom will prevail. 2. The prospect of irreparable injury if the provisional relief is withheld. Tom and his wife Wendy will miss out socializing with their friends built up over 39 years of continual membership in the Club and the continuation of a family tradition of summers at the beach for their 3 children. 3. A balance of the equities. Tom and Wendy are 1 of 530 Members. They have never been charged with any wrongdoing in 39 years. As they are willing to continue to pay full rent for their cabana (and even spending money in the dining room, if permitted) the Club’s 4 4 of 10 FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 economic rights are adequately protected; it stands to suffer not a penny of economic loss. Tom and Wendy will lose their lifelong relationships with friends. “For a discretionary stay, a court may consider "any relevant factor, including the presumptive merits of the appeal and any exigency or hardship confronting any party." (Richard C. Reilly, Practice Commentaries, McKinney's Cons. Laws of NY, CPLR C5519:4, Court Ordered Stay.)” Tax Equity Now NY LLC v City of New York, 2018 N.Y. Misc. LEXIS 5727, *7 (NY Sup., NY Cty, 2008) [J. Lebovits] The Club also argues that a stay cannot be granted because no action is pending. NYSCEF DOC No. 653, Opp. Br., p. 6. The Court has imposed a return date of June 1st for the instant motion. This fact gainsays that argument. Further, the Club argues that a stay can be granted only when “such relief is essential to maintain the status quo pending trial of the action.” Id. This is precisely what Tom seeks in view of the possible proceeding under RPAPL § 713 The Club by its citation to Moody v. Filipowski, 146 A.D.2d 675, 675 (2nd Dept. 1989] is helpful to Tom. Id. A stay will preserve the status quo ante until a decision is reached on the merits absent the constraint of the NSA that is not binding on the parties for lack of its filing as explained supra. The Club relies on the NSA and License Agreement as grounds against the invocation of Tom’s rights under CPLR 5519(a)(6). NYSCEF Doc. No 653, Opp. Br., p. 6. and Fn 3, p. 10. Based on determination that the NSA is not binding because the Club failed to file and pay a fee to file the NSA as required by CPLR 2104, the Club’s reliance on these agreements is misplaced. To sum up, Tom is entitled to: (i) be restored to possession after his unlawful eviction; (ii) 10 days notice; (iii) a special proceeding under RPAPL § 713; (iv) the opportunity to be heard in said proceeding; and assert counterclaims for damages, and, (v) a stay of said proceeding by posting an undertaking. Tom respectfully requests that any RPAPL § 713 proceeding, be commenced in this Court that unlike the Housing Court has jurisdiction to entertain Tom’s counterclaim for compensatory and punitive damages for the Club’s illegal eviction of him and a jury trial. III. The Club lacks legal capacity as its certificate of incorporation is defective. As the Club cannot contradict the admissible documentary evidence of its COI, it shamelessly tries to mislead the Court as to its contents. 5 5 of 10 FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 +2. Plaintiff argues ABC was not validly incorporated because its Certificate of Incorporation purportedly has only four subscribers rather than the required five. But, the certified records of the Secretary of State (see Ex. "A") shows that there were five subscribers: Eugene Tuck, Edward Osterman, Saul Gerber, Edward Alexander and Anna Wilfan.” NYSCEF Doc. No. 627, Affidavit of John P. McEntee Under close scrutiny, the COI reveals, instead of the five (5) typewritten names and five (5) handwritten signatures of subscribers required by the then governing statute, Membership Corporation Law (MCL) § 10, there are only four (4) typewritten names and of those only three (3) inscribed their handwritten signatures on the COI. NYSCEF Doc No. 610, last page. Typewritten names and addresses Handwritten names Eugene Tuck Eugene Tuck 8 Grace Court Brooklyn NY Edward G. Osterman 390 Riverside Drive New York, NY Saul Gerber Saul Gerber 1423 President Street Brooklyn, NY Edward D. Alexander Edward D. Alexander 104 East 57th Street Brooklyn, NY Note: There is an additional handwritten name, Anna Wilfand. However, without her address in the typewritten list, she is an ineligible substitute who may have “walked in from the street.” The MCL, § 10, ¶ 6. requires the address of all subscribers. NYSCEF Doc. No. 611. The purported signature of Osterman is speculated in sealed NYSCEF DOC No. 646 to be “faded.” Why would only one signature fade. It could just as well have been deliberately erased. As membership corporations are not part of the common law, a strict interpretation of the MCL is required. “…a statute in derogation of the common law must be strictly construed (see, Sherman v Robinson, 80 NY2d 483, 487; [***825] D'Amico v Christie, 71 NY2d 76, 83)” Rust v. Reyer, 91 N.Y.2d 355, 360 (1998) 6 6 of 10 FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 The above deviations are fatal to any pretense of legal capacity for the Club to even appear in this Court. The need for deception palpably practiced by the founding subscribers of the Club is explained by the circumstances of its creation in May of 1933. Prohibition had been in effect for 13+ years with no assurance that it would ever end. Bon vivants were looking at a 14th “dry” summer. The use of the MCL to organize a not-for-profit corporation of wealthy members to whom spirits could be resold profitably was a very attractive option. It meant no taxes on profits and no scrutiny by federal or state income tax agencies. The Club’s Members were a potentially large consumer of alcoholic spirits. But where to obtain them? Bootleggers had freighters anchored 3 miles offshore from the Club beyond the State’s regulatory powers. The most famous of which were owned by a man named Bill McCoy (McCoy) who had a reputation as a supplier of spirits that were not watered down. Hence the expression “the real McCoy.” The Court is requested to take judicial notice of an article about McCoy in Wikipedia. William McCoy (rum runner) - Wikipedia. Speedboats, manufactured in nearby Freeport, L. I., could traffic the coveted spirits under cover of darkness from the freighters to the beachfront of the Club. As a private club it was safe from the peering eyes of the public. The historical reason for the Club’s construction of the cabanas was to enable the Members to sleep off their intoxication. Given these murky circumstances it is understandable why there may have been difficulty in getting the required number of responsible parties to subscribe to the certificate of incorporation for what may have been a “cover” to circumvent the laws of the United States and avoid scrutiny by the IRS as well as the New York Department of Taxation and Finance. Not to mention the prospect of a possible criminal conspiracy charge for trying to evade the Prohibition statutes and regulations. A threshold impediment to the plan was that under the MCL § 10, a Justice of the Supreme Court (JSC) had to approve the bona fides of all subscribers to form a not-for-profit corporation. NYSCEF DOC No. 611. A temptation was therefore present to submit one list of placeholder names with a good reputation to a JSC and then switch subscribers’ names in the COI submitted to the NYDOS. In the case cited to in Plaintiff’s brief, NYSCEF Doc No 634, p. 9, the Supreme Court in Albany County revoked an incorporation because there was a difference in the names listed on the application to the JSC that he approved and the names on the certificate filed with the NYDOS. People v. Smith, 121 Misc. 338 (N. Y. Sup. Ct, 1923) [Albany Cty., J. Staley]. The 7 7 of 10 FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 penalty imposed by J. Staley was to “perpetually restrain the commission of the acts complained of and a temporary injunction to restrain such acts….” The Club’s subscribers plainly engaged in wrongdoing by not strictly adhering to MCL § 10, in its formation in 1933. Altering instruments and filing same with a public office destroys their integrity. This wrong cannot be continued by this Court. “It would be contrary to the legal [*393] principle to permit a wrongdoer to benefit from his own wrong and would [***5] be contrary to the public policy of the State.” Utica Teachers Credit Union v. Ayers, 54 Misc. 2d 391, 392-393 (Utica City Ct., 1967) "The ancient equitable adage that 'one may not benefit from his own wrong' still survives and will be applied to achieve the ends of justice." 1202 Realty Association v Evans, 126 Misc 2d 99, 101, 481 N.Y.S.2d 208 (Civ Ct, NY County 1984) [**6] . Haberman v Singer, 2002 N.Y. Misc. LEXIS 2034, *5 (NY Sup, NY Cty, 2002) It is noteworthy that on the stationery of the Club its founding year is listed as 1939. NYSCEF Doc No. 28. The year 1933 appears on its COI. NYSCEF Doc No. 610. It is apparent that the Directors of the Club would rather forget its beginnings. This is an indicia of guilt. It also explains why the Club is anxious to have the Clerk seal records from its Members and the public. NYSCEF Doc No. 653, Op. Memo, Fn 1, p. 5. The bottom line is that absent a proper COI, the Club lacks legal capacity to appear in this Court. A receiver needs to be appointed so that this litigation can continue. Meanwhile Tom can provide rental income for the receiver to administer. IV. The Negotiated Settlement Agreement is not binding on the parties. The NSA’s 20 pages was not filed with the Nassau County Clerk at any time in 2022 by the Club. Only a 1-page, 2¶ stipulation was filed, NYSCEF Doc No. 575, on 1/5/2022. It did not include “the terms of such stipulation” as CPLR 2104 requires in relevant part: “With respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk.” [Emphasis added.] Without filing it can be inferred that the required $35 fee was not paid. “With respect to stipulations of settlement and notwithstanding [*4] the form of the stipulation [**3] of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk." The commentary on that section 8 8 of 10 FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 of the CPLR notes that "CPLR 2104 was amended in 2003 to provide "[w]ith respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk." At the same time, CPLR 8020 was amended to require the defendant to pay the County Clerk $35 with the filing. The legislative history of these amendments makes clear that their purpose was to generate revenue, with the settlement filing fee enacted along with several other filing fee measures. (See, e.g., CPLR 3217[d]; CPLR 8020[a], [d]) {Emphasis added.] Fisher v Stone, 2020 N.Y. Misc. LEXIS 2512, *3-5 (Sup. Ct., NY Cty 2020) [J. Sherwood] The NSA is therefore not binding upon the parties. All of the Club’s arguments that are grounded in the NSA must be discarded and all of Tom’s arguments must be reconsidered de novo, unencumbered by the NSA. Tom informed the Court by his affidavit that he was promised a vested membership with lifetime renewal rights by former Club president Edward Danks and Directors Paul Conte and John Scaduto in return for lending the Club in October 1988, after its Clubhouse burned down, a substantial sum of money in return for a promissory note, with no interest, and an indefinite repayment date. NYSCEF DOC No. 580. See, note at NYSCEF Doc. No. 582. The Club has enjoyed this interest free loan for 35 years. The Club has never contradicted Tom’s assertion of vested membership. It only asserted that he waived this argument in the NSA. With the negativing of the NSA, the vested membership status of Tom must be given legal effect based on the weight of evidence. Any argument by the Club that its bylaws enacted in 2020 provided the right to not invite Tom to renew his membership must be rejected as new bylaws cannot “divest rights which have vested” and “destroy the contract rights of its members.” “It must be deemed to be now established that, even though the right is reserved to the association to amend and change its by-laws, and although the by laws are said to form part of the contract between the association and its members, yet there is no power in the association to so amend its by-laws as to divest rights which have vested, however broad may be [***6] its power as to matters of administration. Within the rules laid down it must be held that no amendment to the by-laws of an association of this character can be made operative to divest rights which have already vested in the members. ( Farmers' Loan & Trust Co. v. Aberle, 19 A.D. 79; cited with approval in Parish v. New York Produce Exchange, 169 N.Y. 34, 49.) The court in the Parish Case (supra) say: "These cases, as we understand them, establish a principle which we deem well supported in reason, that the power of a 9 9 of 10 FILED: NASSAU COUNTY CLERK 05/31/2023 02:45 PM INDEX NO. 606200/2020 NYSCEF DOC. NO. 658 RECEIVED NYSCEF: 05/31/2023 corporation such as this one to amend its by-laws is a power to regulate within reasonable bounds, not a power to destroy the contract rights of its members." (Pp. 50, 51.)” [Emphasis added.] Williams v. Supreme Council, 80 A.D. 402, 404 (2nd Dept., 1903) V. Conclusion WHEREFORE, Tom respectfully seeks reargument of sealed Decision/Order NYSCEF DOC No. 646, its recall and vacatur; restoration of the prior stays and an Order immediately restoring possession of Cabana D-9. If not granted, Tom seeks to be protected by RPAPL § 713, restored to possession of Cabana D-9 and await the requisite 10-day notice, and an eventual hearing; and, upon the granting of permission to appeal No. 646; a stay under CPLR 5519(a)(6) or CPLR 5519(c); or CPLR 2201 of any further proceeding. Tom respectfully seeks such other and further relief as this Court deems just. Garden City, NY May 31, 2023 Respectfully submitted, /s Thomas F. Liotti Thomas F. Liotti, appearing pro se 600 Old Country Road Garden City, NY 11530 516 794-3700 Tlottiesq.@gmail.com According to the software used to prepare this document there are 3,454 words in its body. 10 10 of 10