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  • Thomas Amici v. Edward A. Mazza Esq. Individually and as a Member of Mazza and Amici, LLC, Mazza And Amici, Llc, For The Judicial Dissolution Of Mazza And Amici, Llc Commercial - Contract document preview
  • Thomas Amici v. Edward A. Mazza Esq. Individually and as a Member of Mazza and Amici, LLC, Mazza And Amici, Llc, For The Judicial Dissolution Of Mazza And Amici, Llc Commercial - Contract document preview
  • Thomas Amici v. Edward A. Mazza Esq. Individually and as a Member of Mazza and Amici, LLC, Mazza And Amici, Llc, For The Judicial Dissolution Of Mazza And Amici, Llc Commercial - Contract document preview
  • Thomas Amici v. Edward A. Mazza Esq. Individually and as a Member of Mazza and Amici, LLC, Mazza And Amici, Llc, For The Judicial Dissolution Of Mazza And Amici, Llc Commercial - Contract document preview
  • Thomas Amici v. Edward A. Mazza Esq. Individually and as a Member of Mazza and Amici, LLC, Mazza And Amici, Llc, For The Judicial Dissolution Of Mazza And Amici, Llc Commercial - Contract document preview
  • Thomas Amici v. Edward A. Mazza Esq. Individually and as a Member of Mazza and Amici, LLC, Mazza And Amici, Llc, For The Judicial Dissolution Of Mazza And Amici, Llc Commercial - Contract document preview
  • Thomas Amici v. Edward A. Mazza Esq. Individually and as a Member of Mazza and Amici, LLC, Mazza And Amici, Llc, For The Judicial Dissolution Of Mazza And Amici, Llc Commercial - Contract document preview
  • Thomas Amici v. Edward A. Mazza Esq. Individually and as a Member of Mazza and Amici, LLC, Mazza And Amici, Llc, For The Judicial Dissolution Of Mazza And Amici, Llc Commercial - Contract document preview
						
                                

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FILED: TOMPKINS COUNTY CLERK 01/31/2024 04:56 PM INDEX NO. EF2022-0516 NYSCEF DOC. NO. 23 RECEIVED NYSCEF: 01/31/2024 CI2024-02145 STATE OF NEW YORK Index # : EF2022-0516 SUPREME COURT : COUNTY OF TOMPKINS ----------------------------------------------------------------------- THOMAS AMICI, MEMORANDUM IN SUPPORT OF MOTION TO DISMISS Plaintiff, AND FOR SUMMARY vs. JUDGMENT EDWARD A. MAZZA, ESQ., Individually and as a Member of MAZZA AND AMICI, LLC, Index No. EF2022-0516 MAZZA AND AMICI, and for the Judicial Dissolution of MAZZA AND AMICI, LLC,, Defendant. ----------------------------------------------------------------------- PRELIMINARY STATEMENT This action was commenced by the plaintiff requesting an order pursuant to Limited Liability Law §702 and common law dissolving Mazza and Amici, LLC (“LLC”), the withdrawal of plaintiff, an equitable buyout of the plaintiff, Thomas J. Amici (“Amici”) judgment of defendant, Edward A. Mazza (“Mazza”), individually and as member of the LLC for damages caused by defendants’ breaches of fiduciary duty, fraud, breach of contract and breaches of the implied covenant of good faith fair dealings. The defendant has denied the allegations of the complaint and asserts that there have been no such breaches of fiduciary duty, no fraud, no breach of contract or of any covenants of good faith and fair dealing and no damages to the plaintiff. The LLC has been and continues to operate in an immensely profitable manner. The dispute surrounding plaintiff’s demand to dissolve the LLC is now, and has been throughout the life of the business, the only dispute between the members and that, during this dispute, the LLC business continues to be extremely profitable. 1 of 8 FILED: TOMPKINS COUNTY CLERK 01/31/2024 04:56 PM INDEX NO. EF2022-0516 NYSCEF DOC. NO. 23 RECEIVED NYSCEF: 01/31/2024 CI2024-02145 Index #: EF2022-0516 STATEMENT OF FACTS MAZZA AND AMICI, LLC [“LLC”] is a New York limited liability company formed in January 2012 with two members, Thomas J. Amici [“Amici”] and Edward A. Mazza [“Mazza”]. Prior to the formation of the LLC, these two members, Mazza and Amici, were joint owners of real estate purchased and held by them as residential rentals. They commenced this business in 1986 with the purchase of a few small buildings and the business grew through the acquisition of more buildings. The last building being purchased in 1998 making a total of 20 different tax parcels owned. Along the way, only one building has been sold. The acquisition of the properties, except for one property, was a result of opportunities being presented to Mazza through his contacts, when he was presented with opportunities, he would evaluate them. If he felt it might be a viable opportunity, he would present the opportunity to Amici and Amici would inspect the property and report back to him about the condition thereof. At that time, a joint decision would be made whether to make an offer or not. Once properties were acquired, the two members were hands on operators of the business with Amici being responsible for the maintenance of the buildings and Mazza was responsible for the business aspects. As the business grew, they found that they needed to hire an employee to help with the maintenance and retained some independent contractors to also assist in certain parts of the operation of the business. When the business was started, Mazza presented a proposed partnership agreement to Amici. Upon receipt of it, Amici never spoke to Mazza about it and no partnership agreement was ever signed. Thereafter, Amici presented to Mazza the idea of forming an LLC for this business. Mazza told Amici that he was not sure that forming an LLC would be much of a benefit to them. However, Amici said that he wanted to form one, so an LLC was formed and filed. Attorney Bruno A. Mazza, Jr., Mazza’s father, was the attorney who formed this LLC on or about January 26, 2012. 2 2 of 8 FILED: TOMPKINS COUNTY CLERK 01/31/2024 04:56 PM INDEX NO. EF2022-0516 NYSCEF DOC. NO. 23 RECEIVED NYSCEF: 01/31/2024 CI2024-02145 Index #: EF2022-0516 At the time of formation, Bruno A. Mazza, Jr. prepared a proposed Operating Agreement. A copy of the proposed Operating Agreement was provided to Mazza, who then provided a copy of it to Amici. Upon receipt of it, Amici never spoke about it and it was never signed. Mazza did not act as legal counsel to anyone in the formation of this LLC. He never advised Amici that he was representing the business or him individually in the formation of the LLC. ARGUMENT POINT I DEFENDANT, MAZZA, HAS NOT BREACHED A FIDUCIARY DUTY Amici’s complaint alleges eight separate causes of action against Mazza. The first four causes of action, Breach of Fiduciary Duty, Breach of Contract, Breach of Implied Covenant of Good Faith and Fair Dealing and Rescission allege that Mazza had an implied fiduciary duty to provide legal advice to Amici and that he failed to do so. These causes of action go to the formation of the LLC and are ancillary to the Fifth, Sixth, Seventh and Eighth causes of action which seek the dissolution of the LLC. The first four causes of action are premised upon the incorrect assumption that Mazza assumed a duty to render legal advice to Amici. Amici has not alleged any other breach of fiduciary duty by Mazza. Amici does not allege that he asked Mazza for legal advice and that Mazza gave him incorrect legal advice, just that Mazza was somehow obligated to provide legal advice to his business partner without Amici even asking for it. Mazza never represented that he had any knowledge about LLC’s. Amici’s Complaint in this action alleges that Mazza failed to advise him as to the intricacies of the law restricting a member from dissolving an LLC and that this was a breach of duty. Mazza has never formed an LLC for himself or any of his clients in his legal practice. He did not form this 3 3 of 8 FILED: TOMPKINS COUNTY CLERK 01/31/2024 04:56 PM INDEX NO. EF2022-0516 NYSCEF DOC. NO. 23 RECEIVED NYSCEF: 01/31/2024 CI2024-02145 Index #: EF2022-0516 LLC. Since he did not form LLC’s as part of his law practice, he did not know, until this action was commenced, the intricacies of the law restricting a member from dissolving an LLC. If Amici wanted legal advice with respect to the formation of this business, he could have retained an attorney himself. Amici is no stranger to hiring attorneys. During the time they have been in business, he has hired many other attorneys and, in fact at this very time, he is being represented by aother attorneys in litigation that commenced in 2020 and he just finished a lawsuit that was commenced in 2019. He could have hired an attorney to provide him with legal advice with respect to the LLC. Amici’s Complaint alleges that Mazza induced him to form the LLC to gain an advantage over him. This is not true. It wasn’t even Mazza’s suggestion to form an LLC (Amici EBT pp 17- 18). Amici was the one who wanted the LLC. Mazza merely agreed to it because Amici wanted it. Amici alleges that he relied on Mazza’s advice, guidance, and counsel when he agreed to the LLC. In his deposition testimony, he said that they spoke about the formation of an LLC and Mazza told him briefly what it would entail and he said that was the end of the discussion, Amici did not ask for any more discussion with or advice from Mazza with respect to the LLC (Amici EBT p 18). Amici alleges that Mazza created the LLC and protected only his own interests and failed to safeguard Amici’s interests. Amici and Mazza are each 50% owners of the LLC with equal rights and obligations as members of the LLC. Neither of them is in a minority position. Thus, the effect of not having an Operating Agreement containing an agreement as to withdrawal of a member, would have the same effect on Mazza as it does on Amici. Amici has alleged that Mazza has breached a fiduciary duty to Amici and has been managing the affairs of the business in a dishonest and irregular fashion protecting only his interests. This allegation is not true. Amici has not even alleged any facts of such misconduct much less met his burden of proof to show a single incident where that statement is true. Also, this business is made up of investments in real estate and all but one of those investments were investment opportunities offered to Mazza. He was not obligated to offer any share of it to Amici. 4 4 of 8 FILED: TOMPKINS COUNTY CLERK 01/31/2024 04:56 PM INDEX NO. EF2022-0516 NYSCEF DOC. NO. 23 RECEIVED NYSCEF: 01/31/2024 CI2024-02145 Index #: EF2022-0516 Not only did he offer to share that opportunity with Amici, he did so on a 50/50 basis. This is not consistent with Amici’s statement that he was exploiting Amici’s trust in him to protect only his own interests. The first four causes of action should be dismissed because Amici can demonstrate no economic harm to himself as a result of anything he alleges that Mazza may have said or left unsaid. It is apparent from the tax returns filed by the LLC that Amici has become a millionaire as a consequence of his association with Mazza and their joint efforts as members of the LLC. When asked at his examination before trial whether Mazza had done anything that harmed him financially Amici replied “I don’t know” (Amici EBT p 32). Absent an allegation of actual damages on the part of Amici the first four causes of action should be dismissed. POINT II THERE HAS BEEN NO SHOWING THAT IT IS NOT REASONABLY PRACTICABLE TO CARRY ON THE BUSINESS OF THE LLC The dissolution of a limited liability company in the State of New York is governed by Article VII of the limited Liability Company Law. Section 702 states that a Court “may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.” Judicial dissolution under Section 702 is a drastic remedy. E.g., In The Matter of Dissolution of 1545 Ocean Ave., LLC, 72 A.D.3d 121, 131 (2d Dept. 2010). For this reason, New York courts strictly apply the standard set by Section 702. Matter of Horning v. Horning Constr., LLC, 12 Misc. 3d 402, 413 (Sup. Ct. Monroe Co., 2006). As the Horning court observed: “Where the evidence does not demonstrate that it is not reasonably practicable to carry on the business in the circumstances (Limited Liability Company Law § 702), the court’s discretion, conferred by statute only, is not invoked and the petition must be dismissed.” Id. at 411 5 5 of 8 FILED: TOMPKINS COUNTY CLERK 01/31/2024 04:56 PM INDEX NO. EF2022-0516 NYSCEF DOC. NO. 23 RECEIVED NYSCEF: 01/31/2024 CI2024-02145 Index #: EF2022-0516 This LLC does not have an Operating Agreement. However, it is very clear, and there is no question, that the purpose of the LLC was to purchase residential buildings and to provide the management of them as they rented them out to tenants. This has been the purpose of this business since its inception and has not changed. When a limited liability company is formed without an operating agreement it becomes subject to the numerous sections in the Limited Liability Company Law that set forth default provisions applicable to the limited liability company (Matter of Eight of Swords, LLC, 96 AD 3d 839 [2nd Dept 2012]). Section 702 of the Limited liability Company law provides that the Supreme Court in the judicial district in which the office of the limited liability company is located, may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement (Matter of 1545 Ocean Ave., LLC, 72 AD 3d 121, 126 [2nd Dept 2010]; Matter of Kassab v. Kassab, 195 AD 3d 830 [2nd Dept 2021]). The standard for dissolution under the Limited Liability Company Law is more stringent than that under either the Business Corporation Law or the Partnership Law. Without more, disagreements between the members with regard to the accounting of the entity are insufficient to warrant dissolution (Matter of 1545 Ocean Ave., LLC, 72 AD 3d 121, 126-28 [2nd Dept 2010]). The announced intention of a member to withdraw does not trigger dissolution of a limited liability company and dissolution in the absence of an operating agreement can only be had upon satisfaction of the standard of Section 702, ie whenever it is not reasonably practicable to carry on the business (Limited Liability Law §701; Matter of Horning v. Horning Constr., LLC, 12 Misc 3d 402, 408 [Sup. Ct. Monroe Co. 2006]). In Horning, the Court dismissed a dissolution proceeding because the LLC was still turning a profit, despite continued in-fighting and animosity among the members which resulted in lower profits. In the subject LLC, other than the dispute as to Amici’s 6 6 of 8 FILED: TOMPKINS COUNTY CLERK 01/31/2024 04:56 PM INDEX NO. EF2022-0516 NYSCEF DOC. NO. 23 RECEIVED NYSCEF: 01/31/2024 CI2024-02145 Index #: EF2022-0516 withdrawal and dissolution of the LLC, there has been no in-fighting and profits have continued to be substantial and increasing in size each year. An Operating Agreement was proposed to the members, but was not signed. The Operating Agreement that was proposed did not contain a provision relating to the withdrawal of a member. Pursuant to Limited Liability Law Section 606, absent a provision in the Operating Agreement with respect to withdrawal of a member, the member may not withdraw prior to the dissolution of the LLC. As alleged in Amici’s Complaint, the business was operating well until September 2021. There had been no disputes. The profitability of the business has grown steadily over the years including the past few years. This has remained true even though Amici has reduced his workload in the business. A few years ago, Amici began discussing the idea that he was getting older and might want to retire. Then, a couple years ago, he stated that he wanted to retire, Mazza advised him that he did not want to retire and wanted to continue operating this business in its current business model, which requires it to remain at current size. At that time, they began discussions of how this could happen, but they have not been able to come to an agreement on it. The only “dispute” between these parties has been with regard to Amici’s withdrawal from the LLC. Amici did not want to withdraw from the LLC because they were in a dispute in some way with the operation of the business. Instead, the only dispute between the parties is Amici’s desire to dissolve the LLC so that he can withdraw and retire. In the present case Mazza and Amici, LLC continues to thrive despite Amici’s stated wish to exit from the company. Thus, the Court should refuse to grant dissolution. (Matter of Horning v. Horning Constr., LLC, 12 Misc 3d 402 [Sup. Ct. Monroe Co. 2006]). The plaintiff has alleged no facts to the contrary and cannot demonstrate that it is not reasonably practicable to carry on the business. 7 7 of 8 FILED: TOMPKINS COUNTY CLERK 01/31/2024 04:56 PM INDEX NO. EF2022-0516 NYSCEF DOC. NO. 23 RECEIVED NYSCEF: 01/31/2024 CI2024-02145 Index #: EF2022-0516 CONCLUSION The complaint herein should be dismissed. Dated: January 31, 2024 Dirk A. Digitally signed by Dirk A. Galbraith Date: 2024.01.31 Galbraith 15:04:47 -05'00' ______________________________ DIRK A. GALBRAITH, ESQ. Coughlin & Gerhart, LLP Attorneys for Defendant 798 Cascadilla Street, Suite A P.O. Box 6599 Ithaca, New York 14851-6599 Telephone: (607) 379-6709 8 8 of 8