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FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
STEVEN OSTAD,
Index No.:
Plaintiff,
Date Index No. Purchased:
-against-
SUMMONS
SHAUN MOAMEN,
Defendant.
TO THE ABOVE-NAMED DEFENDANT:
YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve
a copy of your answer, or, if the complaint is not served with this summons, to serve a notice of
appearance or demand for complaint on the plaintiffs’ attorney within twenty (20) days after the
service of this summons, exclusive of the day of service (or within thirty (30) days after the service
is complete if the summons is not personally delivered to you within the State of New York); and
in case of your failure to appear or answer, judgment will be taken against you by default for the
relief demanded herein.
Plaintiff designates the County of Nassau as the venue for trial. The basis for venue is that
the subject matter of this action is located in the County of Nassau.
Dated: March 20, 2024
New York, New York
RUKAB BRASH PLLC
By:
Jason Jacobs, Esq.
50 West 17th Street, Suite 9-S
New York, New York 10011
(212) 257-1960
Attorneys for Plaintiff
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
STEVEN OSTAD,
Index No.:
Plaintiff,
-against-
VERIFIED COMPLAINT
SHAUN MOAMEN,
Defendant.
Plaintiff Steven Ostad (“Plaintiff”), by his attorney, Rukab Brash PLLC, as and for his
verified complaint against defendant Shaun Moamen (“Defendant” or “Moamen”) alleges as
follows:
NATURE OF THE ACTION
1. In this action, Plaintiff seeks (i) vacatur of a certain judgment entered pursuant to a
confession of judgment filed in this Court under Index No. 613457/2023, which was obtained
through Defendant’s material misrepresentations, coercion and duress, and was not for a debt justly
due, (ii) to rescind promissory notes which also were obtained through Defendant’s material
misrepresentations, coercion and duress, and (ii) a declaratory judgment declaring that the
confession of judgment, promissory notes, and a certain letter agreement entered into by Plaintiff
are void and unenforceable.
THE PARTIES
2. Plaintiff is an individual residing in the State of New York, County of New York.
3. Defendant is an individual, who, upon information and belief, resides in the State
of New York, County of Nassau.
JURISDICTION & VENUE
4. This Court has personal jurisdiction over Defendant pursuant to CPLR § 301.
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5. Venue is proper in Nassau County pursuant to CPLR § 503 because it is where
substantial part of the events or omissions giving rise to the claims occurred.
FACTUAL BACKGROUND
1. Plaintiff and Defendant share a twenty year friendship with each other.
2. In late 2021 and 2022, Plaintiff and Defendant discussed potential real estate
investment opportunities.
3. Initially, in late 2021 and early 2022, Plaintiff discussed with Defendant a potential
investment by Defendant into a property located at 8 North Cape Lane, East Hampton, New York
(“8 North Cape”). Defendant initially agreed to provide Plaintiff an equity investment of $400,000
in the acquisition of 8 North Cape.
4. Despite agreeing to invest $400,000 in Plaintiff’s acquisition of 8 North Cape,
Defendant was unable to fully fund his committed investment. Despite Plaintiff’s reliance on
Defendant’s investment commitment, Plaintiff proceeded with the acquisition without Defendant.
5. Upon information and belief, in or around April 2022, Defendant proposed to his
uncle, Kambiz Riazi (“Riazi”), that he purchase the property located at 6 Grape Arbor Lane, East
Hampton, New York (the “Property”), which Plaintiff then owned through a limited liability
company.
6. On or about May 12, 2022, non-party 6 Grape Arbor One LLC (“Grape Arbor”)
purchased the Property from 27 Howard Street LLC for a contract price of $3,500,000 (the
“Purchase”).
7. At all relevant times herein, Plaintiff owned all of the membership interests in 27
Howard Street LLC.
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8. Upon information and belief, at the time of the Purchase, Riazi owned all or
substantially all of the membership interests of Grape Arbor.
9. Upon information and belief, approximately ten (10) months after the Purchase,
Grape Arbor and Riazi began experiencing severe financial difficulties, including Grape Arbor’s
inability to pay the carrying costs of the Property and service the substantial secured and unsecured
debt that Grape Arbor obtained to finance the purchase and renovation of the Property.
10. Upon information and belief, Riazi personally guaranteed some or all of the Grape
Arbor’s secured and unsecured debt.
11. Upon information and belief, in the midst of these financial difficulties, Defendant
and Riazi became unable to complete the renovations and were unable to sell the Property unless
and until they completed the renovations at the Property. Accordingly, upon information and
belief, Grape Arbor and Riazi were in dire needed of capital to satisfy the carrying costs of the
debt on the Property and to complete the renovations at the Property.
12. Upon information and belief, by at least February 1, 2023, Grape Arbor had
negative equity and had insufficient capital to continue as a going concern.
13. Defendant, needing a lifeline for Riazi, his uncle, approached Plaintiff, his “friend”
of twenty years, for financial assistance, who, through a limited liability company, had sold Grape
Arbor the Property in May of 2022.
14. While “requesting” financial assistance from Plaintiff, Defendant became
increasingly hostile towards Plaintiff given Plaintiff’s hesitancy to meet Defendant’s financial
demands.
15. When Plaintiff became unwilling to provide financial assistance, Defendant
increased his pressure upon Plaintiff by, among other things, giving Plaintiff an ultimatum: either
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Plaintiff provided Defendant the funds he requested – initially $400,000 and, a month later, an
additional $350,000 – or Defendant would tell Plaintiff’s family and business associates untrue
and defamatory statements, which given Defendant’s twenty-year friendship with Plaintiff,
Defendant knew, even if untrue, would cause irreparable harm to Plaintiff’s relationships and
reputation.
16. Faced with Defendant’s ultimatum, on February 9, 2023, Plaintiff executed a
promissory note in favor of Defendant in the principal amount of $400,000 (the “Note”).
17. Plaintiff did not receive any consideration – either monetary or non-monetary –
from Defendant for the Note.
18. In early March 2023, Defendant, yet again under pressure with Grape Arbor’s
lenders, began to extort Plaintiff. This time, Defendant demanded, in addition to the amount
purportedly due under the Note, that Plaintiff pay him an additional $400,000.
19. In connection with Defendant’s demand, on March 13, 2023, Defendant’s counsel
sent an e-mail to Plaintiff and his counsel stating:
Attached please find the updated note which has been amended to reflect
the original $400,000 (with interest accrued) PLUS a new liquidity amount
of $400,000 to assist with the liquidity needs on the Grape Arbor project
to stay the foreclosure action that has been commenced. The new
$400,000 amount will be paid in the short term with a significant portion
of it being payable within sixty (60) days to enable Shaun to avoid a
foreclosure with the bank or the bank simply cutting off negotiations,
finishing the project themselves (or electing not to) and suing Riazi
(Shaun’s uncle) under the personal guaranty on the Grape Arbor loan. We
agreed that we would do a side letter for Steve Ostad to receive back the
new $400,000 in the form of equity distributions and would put him in the
waterfall behind Shaun/Riazi to be made whole after Shaun/Riazi are
made whole but before Shaun/Riazi see any profits from the property. We
need the revised note to be executed by tomorrow when we have a meeting
with the lenders of Grape Arbor so we can commit to a liquidity timeline
with them and get a workout in place. As agreed with Steve today, please
let us know by 5pm the amount to put in for the 60 day / 150 day timelines
so we can get this wrapped up.
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20. In response to Defendant’s coercion, on March 13, 2023, Plaintiff executed an
amended and restated promissory note (the “Amended and Restated Note”) in the principal
amount of $751,666.67 – the amount purportedly due on the Note ($400,000 with accrued interest),
and an additional $350,000.
21. Under the Amended and Restated Note, Plaintiff was to pay Defendant (i) $150,000
on or before May 12, 2023 with accrued interest, (ii) $50,000 on or before July 11, 2023 with
accrued interest, and (iii) 551,667.67 on or before March 12, 2023 with accrued interest.
22. At the time the Amended and Restated Note was executed, Plaintiff did not receive
any consideration in connection with the Amended and Restated Note.
23. While Defendant’s counsel represented to Plaintiff prior to execution of the
Amended and Restated Note that Defendant and Riazi would provide Plaintiff “a side letter […]
to receive back the new $400,000 in the form of equity distributions and would put him in the
waterfall behind Shaun/Riazi to be made whole after Shaun/Riazi are made whole but before
Shaun/Riazi see any profits from the property[,]” no such “side letter” was provided to Plaintiff at
or around the time Plaintiff executed the Amended and Restated Note.
24. Defendant and Defendant’s counsel knew or should have known that given Grape
Arbor’s indebtedness – which, upon information and belief, substantially exceeded the value of
the Property –Plaintiff would not, and indeed had no chance of, “receiv[ing] back the new
$400,000 in the form of equity distributions.”
25. In May 2023, when Plaintiff did not pay the initial payment under the Amended
and Restated Note of $150,000 by May 12, 2023, Defendant threatened to commence litigation
against Plaintiff to enforce the Amended and Restated Note and began to, yet again, extort Plaintiff.
This time, Defendant gave Plaintiff another ultimatum: either Plaintiff executed a confession of
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judgment in exchange Defendant’s forbearance from commencing litigation and to abate his
coercion and threats of defaming Plaintiff, or else Defendant would commence litigation, and
proceed to defame Plaintiff.
26. In an e-mail dated June 14, 2023, counsel for Plaintiff inquired with Defendant’s
counsel concerning the propriety of the Note and the Amended and Restated Note, stating:
I am trying to get an understanding of the “notes.” What was the
consideration (if any) for the notes? [Plaintiff] did not receive any funds
in exchange for either note. Based on our call, [Defendant] is not even a
member or interest holder in [Grape Arbor, which] owns the [P]roperty.
27. In response to Plaintiff’s counsel’s e-mail, Stephen Haskin, Defendant’s step-father
responded to Plaintiff’s counsel’s June 14, 2023 e-mail, stating:
Steven
Greg, our attorney, shared [your attorney’s] question with us asking what
the consideration for the notes was. You know what the consideration was
for the notes relating to Stone Arch and 6 Grape. Could you please share
that with him. Thank you.
Steve
28. On June 14, 2023, in the midst of the parties’ e-mails, Defendant sent a text message
to Plaintiff stating:
You think you’re just going to hide away behind your attorney. If you
don’t do this for me, I swear man I will file and I promise you I will not
let you live this down. We will go after every asset and business and person
you’re associated with, and everyone will know that you fucked me and
[my] poor uncle over. And if I have to, I’ll go past that…”
29. On June 21, 2023, faced with Defendant’s coercion, Plaintiff executed a certain
confession of judgment (the “Confession of Judgment”).
30. The Confession of Judgment states, among other things, that it “is for a debt justly
due to the [Defendant] arising from the following facts: I executed an amended promissory note
dated March 2023 (“Promissory Note”) memorializing the repayment of monetary and non-
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monetary investments and debt into real estate ventures for the following properties: 8 North Cape
Lane, East Hampton, New York 11937; and (2) 6 Grape Harbor [sic], East Hampton, New York
11937.”
31. Neither the Note nor the Amended and Restated Note were for the “repayment of
monetary investments and non-monetary investments and debt into real estate ventures…”
32. The caption of the Confession of Judgment provides for the document to be filed
in the “Supreme Court of the State of New York” and “County of Suffolk[.]”
33. The Confession of Judgment states that Plaintiff “authorizes the entry of judgment
by [Defendant] in Suffolk County.” Additionally, the Confession of Judgment states that
“[Plaintiff] hereby confess[es] to judgment and authority entry of judgment in the Supreme Court
of the State of New York, County of New York…”
34. On June 21, 2023, Defendant and his uncle, Riazi, provided Plaintiff with a letter
agreement (the “Letter Agreement”) bearing Riazi’s letterhead regarding “Distribution Rights,”
which provided, among other things, that the “[Amended and Restated Note] was entered into by
[Plaintiff] and [Defendant] to (x) repay a loan in the amount of $401,666.67 made to [Plaintiff] by
[Defendant] in connection with [8 North Cape] (y) to repay [Defendant], on [Riazi’s] behalf, for
failure to fund your investment into and to oversee the renovation of the [Property], which failure
to so invest and oversee was valued at an agreed amount of $350,000 prior to execution of the
Promissory Note.”
35. Plaintiff executed the Letter Agreement contemporaneously with the Confession of
Judgment and did so solely as a result of Defendant’s coercion.
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36. The Letter Agreement contained materially different terms than those represented
to Plaintiff prior to executing the Amended and Restated Note, which Plaintiff had executed
months earlier.
37. Defendant neither loaned nor otherwise provided Plaintiff the amount of
$401,666.67 in connection with the real property located at 8 North Cape Lane, East Hampton,
New York.
38. Plaintiff did not agree at any time to invest in or to oversee the renovation of the
Property.
39. On August 14, 2023, Defendant commenced an action in the Supreme Court of the
State of New York, County of Nassau captioned Shaun Moamem v. Steven Ostad (Index No.:
613457/2023) (the “COJ Action”) in which Defendant filed the Confession of Judgment.
40. Notwithstanding that the Confession of Judgment was invalid on its face, on August
22, 2023, the Clerk of the Court for Nassau County entered judgment against Plaintiff in the
amount of $809,500.87 (the “Judgment”) in the COJ Action.
FIRST CAUSE OF ACTION
(Fraudulent Inducement)
41. Plaintiff repeats and realleges the foregoing paragraphs of the Complaint as if more
fully set forth herein at length.
42. Defendant intended his extortionist threats to publicly defame Plaintiff to coerce
Plaintiff to execute the Note, Amended and Restated Note, the Letter Agreement and the
Confession of Judgment.
43. Defendant knew before and/or at the time Plaintiff executed the Amended and
Restated Note that Plaintiff would never “receive back the new $400,000 in the form of equity
distributions” from Grape Arbor.
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44. Defendant knew that Plaintiff would justifiably rely upon the foregoing statements.
45. Plaintiff did rely on Defendant’s and his agent’s misrepresentations in signing the
Note, Amended and Restated Note, Letter Agreement and Confession of Judgment.
46. Plaintiff suffered damages as a result of his reliance on Defendant’s material
misrepresentations by, among other things, been coerced into admitting to a non-existent debt of
$751,666.67 in the Confession of Judgment.
47. Defendant procured the Note, Amended and Restated Note, Letter Agreement and
Confession of Judgment from Plaintiff through material misrepresentations, coercion, and duress,
which in the absence of the material misrepresentations, coercion, and duress, Plaintiff would not
have executed.
48. In light of the foregoing, Plaintiff is entitled to recission of the Note, Amended and
Restated Note, Letter Agreement, and Confession of Judgment.
SECOND CAUSE OF ACTION
(Vacatur of Judgment pursuant to CPLR § 5015(a)(3))
49. Plaintiff repeats and realleges the foregoing paragraphs of the Complaint as if more
fully set forth herein at length.
50. Defendant utilized fraud, misrepresentation, or other misconduct in order to procure
execution of the Note, the Amended and Restated Note and the Confession of Judgment.
51. In light of the foregoing, Plaintiff is entitled to vacatur of the Judgment pursuant
to CPLR § 5015(a)(3).
THIRD CAUSE OF ACTION
(Vacatur of Judgment pursuant to CPLR § 5015(a)(4))
52. Plaintiff repeats and realleges the foregoing paragraphs of the Complaint as if more
fully set forth herein at length.
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53. It is a statutory requirement that a confession of judgment state the county where
the defendant resides.
54. It is a statutory requirement that a confession of judgment for a monetary judgment
state the facts out of which the debt arose.
55. It is a statutory requirement that a confession of judgment for a monetary judgment
be for a debt justly due or to become due.
56. The Confession of Judgment was invalid on its face because it was contradictory
as to which county Defendant was permitted to file it.
57. The Confession of Judgment was invalid on its face because it did not state the facts
out of which the purported debt therein arose.
58. The Confession of Judgment was invalid because it was not for a debt justly due or
to become due.
59. Since Confession of Judgment was invalid on its face, the Clerk of the Court for
Nassau County did not have jurisdiction to enter the Judgment.
60. In light of the foregoing, Plaintiff is entitled to vacatur of the Judgment pursuant to
CPLR § 5015(a)(4).
FOURTH CAUSE OF ACTION
(Declaratory Judgment)
61. Plaintiff repeats and realleges the foregoing paragraphs of the Complaint as if more
fully set forth herein at length.
62. The Note, Amended and Restated Note, Letter Agreement, and Confession of
Judgment are documents which were procured by, among other things, coercion, material
misrepresentations, and duress.
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63. The Note, Amended and Restated Note, Letter Agreement, and Confession of
Judgment are documents which were procured without consideration.
64. The Note, Amended and Restated Note and Confession of Judgment reflect an
indebtedness which does not actually exist.
65. Plaintiff has been damaged by the Note, Amended and Restated Note, and
Confession of Judgment, which was the basis of the entry of the Judgment against Plaintiff in the
COJ Action.
66. The present dispute over the Note, Amended and Restated Note, Letter Agreement,
and Confession of Judgment presents a justiciable controversy in which the issues are present, real,
definite, and substantial and affect existing legal relations between Plaintiff and Defendant.
67. Without a declaration of rights, Plaintiff will continue to suffer harm from the Note,
Amended and Restated Note, Letter Agreement and Confession of Judgment.
68. Plaintiff has no adequate remedy at law.
69. Accordingly, Plaintiff is entitled to a judgment declaring that (i) the Note, Amended
and Restated Note, and Confession of Judgment do not represent an actual debt and, consequently,
are void and unenforceable, and (ii) the Letter Agreement was procured as a result of
misrepresentations, coercion, and distress, and therefore, void and unenforceable.
WHEREFORE, Plaintiff demands judgment against Defendant as follows:
(a) On his first cause of action, an Order rescinding the Note, Amended and Restated
Note, Letter Agreement and Confession of Judgment;
(b) On his second cause of action, an Order vacating the Judgment entered in this Court
on August 22, 2023 under Index No.: 613457/2023;
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(c) On his third cause of action, an Order vacating the Judgment entered in this Court
on August 22, 2023 under Index No.: 613457/2023;
(d) On his fourth cause of action, an Order declaring that the amounts purportedly due
under the Note, Amended and Restated Note, and Confession of Judgment do not represent an
actual debt, and that Note, Amended and Restated Note, Letter Agreement, and Confession of
Judgment are void and unenforceable;
(e) Such other and further relief as this Court deems just and proper.
Dated: March 20, 2024
New York, New York
RUKAB BRASH PLLC
By:
Jason Jacobs
50 West 17th Street, Suite 9-S
New York, NY 10011
P. (212) 257-1960
Attorney for Plaintiff
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DocuSign Envelope ID: ED09AD6A-DA61-45BC-BCB1-5FE3B7279CEC
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
STEVEN OSTAD,
IIndex No.:
Plaintiff,
-against-
VERIFICATION
SHAUN MOAMEN,
Defendant.
__________________________________________
I, Steven Ostad, am the Plaintiff in the above-captioned action.
I have read the foregoing Verified Complaint and know the contents thereof are true to
my knowledge, except as to the matters which are stated to be alleged upon information and
belief, and as to those matters, I believe them to be true. My knowledge and beliefs are based on
my personal knowledge, and my files and records.
20th
I affirm this day of March 2024, under the penalties of perjury under the laws of New
York, which may include a fine or imprisonment, that the foregoing is true, and I understand that
the foregoing may be used in an action or proceeding in a court of law.
DocuSignedby:
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Preview
FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU STEVEN OSTAD, Index No.: Plaintiff, Date Index No. Purchased: -against- SUMMONS SHAUN MOAMEN, Defendant. TO THE ABOVE-NAMED DEFENDANT: YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve a copy of your answer, or, if the complaint is not served with this summons, to serve a notice of appearance or demand for complaint on the plaintiffs’ attorney within twenty (20) days after the service of this summons, exclusive of the day of service (or within thirty (30) days after the service is complete if the summons is not personally delivered to you within the State of New York); and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded herein. Plaintiff designates the County of Nassau as the venue for trial. The basis for venue is that the subject matter of this action is located in the County of Nassau. Dated: March 20, 2024 New York, New York RUKAB BRASH PLLC By: Jason Jacobs, Esq. 50 West 17th Street, Suite 9-S New York, New York 10011 (212) 257-1960 Attorneys for Plaintiff 1 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU STEVEN OSTAD, Index No.: Plaintiff, -against- VERIFIED COMPLAINT SHAUN MOAMEN, Defendant. Plaintiff Steven Ostad (“Plaintiff”), by his attorney, Rukab Brash PLLC, as and for his verified complaint against defendant Shaun Moamen (“Defendant” or “Moamen”) alleges as follows: NATURE OF THE ACTION 1. In this action, Plaintiff seeks (i) vacatur of a certain judgment entered pursuant to a confession of judgment filed in this Court under Index No. 613457/2023, which was obtained through Defendant’s material misrepresentations, coercion and duress, and was not for a debt justly due, (ii) to rescind promissory notes which also were obtained through Defendant’s material misrepresentations, coercion and duress, and (ii) a declaratory judgment declaring that the confession of judgment, promissory notes, and a certain letter agreement entered into by Plaintiff are void and unenforceable. THE PARTIES 2. Plaintiff is an individual residing in the State of New York, County of New York. 3. Defendant is an individual, who, upon information and belief, resides in the State of New York, County of Nassau. JURISDICTION & VENUE 4. This Court has personal jurisdiction over Defendant pursuant to CPLR § 301. 2 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 5. Venue is proper in Nassau County pursuant to CPLR § 503 because it is where substantial part of the events or omissions giving rise to the claims occurred. FACTUAL BACKGROUND 1. Plaintiff and Defendant share a twenty year friendship with each other. 2. In late 2021 and 2022, Plaintiff and Defendant discussed potential real estate investment opportunities. 3. Initially, in late 2021 and early 2022, Plaintiff discussed with Defendant a potential investment by Defendant into a property located at 8 North Cape Lane, East Hampton, New York (“8 North Cape”). Defendant initially agreed to provide Plaintiff an equity investment of $400,000 in the acquisition of 8 North Cape. 4. Despite agreeing to invest $400,000 in Plaintiff’s acquisition of 8 North Cape, Defendant was unable to fully fund his committed investment. Despite Plaintiff’s reliance on Defendant’s investment commitment, Plaintiff proceeded with the acquisition without Defendant. 5. Upon information and belief, in or around April 2022, Defendant proposed to his uncle, Kambiz Riazi (“Riazi”), that he purchase the property located at 6 Grape Arbor Lane, East Hampton, New York (the “Property”), which Plaintiff then owned through a limited liability company. 6. On or about May 12, 2022, non-party 6 Grape Arbor One LLC (“Grape Arbor”) purchased the Property from 27 Howard Street LLC for a contract price of $3,500,000 (the “Purchase”). 7. At all relevant times herein, Plaintiff owned all of the membership interests in 27 Howard Street LLC. 2 3 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 8. Upon information and belief, at the time of the Purchase, Riazi owned all or substantially all of the membership interests of Grape Arbor. 9. Upon information and belief, approximately ten (10) months after the Purchase, Grape Arbor and Riazi began experiencing severe financial difficulties, including Grape Arbor’s inability to pay the carrying costs of the Property and service the substantial secured and unsecured debt that Grape Arbor obtained to finance the purchase and renovation of the Property. 10. Upon information and belief, Riazi personally guaranteed some or all of the Grape Arbor’s secured and unsecured debt. 11. Upon information and belief, in the midst of these financial difficulties, Defendant and Riazi became unable to complete the renovations and were unable to sell the Property unless and until they completed the renovations at the Property. Accordingly, upon information and belief, Grape Arbor and Riazi were in dire needed of capital to satisfy the carrying costs of the debt on the Property and to complete the renovations at the Property. 12. Upon information and belief, by at least February 1, 2023, Grape Arbor had negative equity and had insufficient capital to continue as a going concern. 13. Defendant, needing a lifeline for Riazi, his uncle, approached Plaintiff, his “friend” of twenty years, for financial assistance, who, through a limited liability company, had sold Grape Arbor the Property in May of 2022. 14. While “requesting” financial assistance from Plaintiff, Defendant became increasingly hostile towards Plaintiff given Plaintiff’s hesitancy to meet Defendant’s financial demands. 15. When Plaintiff became unwilling to provide financial assistance, Defendant increased his pressure upon Plaintiff by, among other things, giving Plaintiff an ultimatum: either 3 4 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 Plaintiff provided Defendant the funds he requested – initially $400,000 and, a month later, an additional $350,000 – or Defendant would tell Plaintiff’s family and business associates untrue and defamatory statements, which given Defendant’s twenty-year friendship with Plaintiff, Defendant knew, even if untrue, would cause irreparable harm to Plaintiff’s relationships and reputation. 16. Faced with Defendant’s ultimatum, on February 9, 2023, Plaintiff executed a promissory note in favor of Defendant in the principal amount of $400,000 (the “Note”). 17. Plaintiff did not receive any consideration – either monetary or non-monetary – from Defendant for the Note. 18. In early March 2023, Defendant, yet again under pressure with Grape Arbor’s lenders, began to extort Plaintiff. This time, Defendant demanded, in addition to the amount purportedly due under the Note, that Plaintiff pay him an additional $400,000. 19. In connection with Defendant’s demand, on March 13, 2023, Defendant’s counsel sent an e-mail to Plaintiff and his counsel stating: Attached please find the updated note which has been amended to reflect the original $400,000 (with interest accrued) PLUS a new liquidity amount of $400,000 to assist with the liquidity needs on the Grape Arbor project to stay the foreclosure action that has been commenced. The new $400,000 amount will be paid in the short term with a significant portion of it being payable within sixty (60) days to enable Shaun to avoid a foreclosure with the bank or the bank simply cutting off negotiations, finishing the project themselves (or electing not to) and suing Riazi (Shaun’s uncle) under the personal guaranty on the Grape Arbor loan. We agreed that we would do a side letter for Steve Ostad to receive back the new $400,000 in the form of equity distributions and would put him in the waterfall behind Shaun/Riazi to be made whole after Shaun/Riazi are made whole but before Shaun/Riazi see any profits from the property. We need the revised note to be executed by tomorrow when we have a meeting with the lenders of Grape Arbor so we can commit to a liquidity timeline with them and get a workout in place. As agreed with Steve today, please let us know by 5pm the amount to put in for the 60 day / 150 day timelines so we can get this wrapped up. 4 5 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 20. In response to Defendant’s coercion, on March 13, 2023, Plaintiff executed an amended and restated promissory note (the “Amended and Restated Note”) in the principal amount of $751,666.67 – the amount purportedly due on the Note ($400,000 with accrued interest), and an additional $350,000. 21. Under the Amended and Restated Note, Plaintiff was to pay Defendant (i) $150,000 on or before May 12, 2023 with accrued interest, (ii) $50,000 on or before July 11, 2023 with accrued interest, and (iii) 551,667.67 on or before March 12, 2023 with accrued interest. 22. At the time the Amended and Restated Note was executed, Plaintiff did not receive any consideration in connection with the Amended and Restated Note. 23. While Defendant’s counsel represented to Plaintiff prior to execution of the Amended and Restated Note that Defendant and Riazi would provide Plaintiff “a side letter […] to receive back the new $400,000 in the form of equity distributions and would put him in the waterfall behind Shaun/Riazi to be made whole after Shaun/Riazi are made whole but before Shaun/Riazi see any profits from the property[,]” no such “side letter” was provided to Plaintiff at or around the time Plaintiff executed the Amended and Restated Note. 24. Defendant and Defendant’s counsel knew or should have known that given Grape Arbor’s indebtedness – which, upon information and belief, substantially exceeded the value of the Property –Plaintiff would not, and indeed had no chance of, “receiv[ing] back the new $400,000 in the form of equity distributions.” 25. In May 2023, when Plaintiff did not pay the initial payment under the Amended and Restated Note of $150,000 by May 12, 2023, Defendant threatened to commence litigation against Plaintiff to enforce the Amended and Restated Note and began to, yet again, extort Plaintiff. This time, Defendant gave Plaintiff another ultimatum: either Plaintiff executed a confession of 5 6 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 judgment in exchange Defendant’s forbearance from commencing litigation and to abate his coercion and threats of defaming Plaintiff, or else Defendant would commence litigation, and proceed to defame Plaintiff. 26. In an e-mail dated June 14, 2023, counsel for Plaintiff inquired with Defendant’s counsel concerning the propriety of the Note and the Amended and Restated Note, stating: I am trying to get an understanding of the “notes.” What was the consideration (if any) for the notes? [Plaintiff] did not receive any funds in exchange for either note. Based on our call, [Defendant] is not even a member or interest holder in [Grape Arbor, which] owns the [P]roperty. 27. In response to Plaintiff’s counsel’s e-mail, Stephen Haskin, Defendant’s step-father responded to Plaintiff’s counsel’s June 14, 2023 e-mail, stating: Steven Greg, our attorney, shared [your attorney’s] question with us asking what the consideration for the notes was. You know what the consideration was for the notes relating to Stone Arch and 6 Grape. Could you please share that with him. Thank you. Steve 28. On June 14, 2023, in the midst of the parties’ e-mails, Defendant sent a text message to Plaintiff stating: You think you’re just going to hide away behind your attorney. If you don’t do this for me, I swear man I will file and I promise you I will not let you live this down. We will go after every asset and business and person you’re associated with, and everyone will know that you fucked me and [my] poor uncle over. And if I have to, I’ll go past that…” 29. On June 21, 2023, faced with Defendant’s coercion, Plaintiff executed a certain confession of judgment (the “Confession of Judgment”). 30. The Confession of Judgment states, among other things, that it “is for a debt justly due to the [Defendant] arising from the following facts: I executed an amended promissory note dated March 2023 (“Promissory Note”) memorializing the repayment of monetary and non- 6 7 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 monetary investments and debt into real estate ventures for the following properties: 8 North Cape Lane, East Hampton, New York 11937; and (2) 6 Grape Harbor [sic], East Hampton, New York 11937.” 31. Neither the Note nor the Amended and Restated Note were for the “repayment of monetary investments and non-monetary investments and debt into real estate ventures…” 32. The caption of the Confession of Judgment provides for the document to be filed in the “Supreme Court of the State of New York” and “County of Suffolk[.]” 33. The Confession of Judgment states that Plaintiff “authorizes the entry of judgment by [Defendant] in Suffolk County.” Additionally, the Confession of Judgment states that “[Plaintiff] hereby confess[es] to judgment and authority entry of judgment in the Supreme Court of the State of New York, County of New York…” 34. On June 21, 2023, Defendant and his uncle, Riazi, provided Plaintiff with a letter agreement (the “Letter Agreement”) bearing Riazi’s letterhead regarding “Distribution Rights,” which provided, among other things, that the “[Amended and Restated Note] was entered into by [Plaintiff] and [Defendant] to (x) repay a loan in the amount of $401,666.67 made to [Plaintiff] by [Defendant] in connection with [8 North Cape] (y) to repay [Defendant], on [Riazi’s] behalf, for failure to fund your investment into and to oversee the renovation of the [Property], which failure to so invest and oversee was valued at an agreed amount of $350,000 prior to execution of the Promissory Note.” 35. Plaintiff executed the Letter Agreement contemporaneously with the Confession of Judgment and did so solely as a result of Defendant’s coercion. 7 8 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 36. The Letter Agreement contained materially different terms than those represented to Plaintiff prior to executing the Amended and Restated Note, which Plaintiff had executed months earlier. 37. Defendant neither loaned nor otherwise provided Plaintiff the amount of $401,666.67 in connection with the real property located at 8 North Cape Lane, East Hampton, New York. 38. Plaintiff did not agree at any time to invest in or to oversee the renovation of the Property. 39. On August 14, 2023, Defendant commenced an action in the Supreme Court of the State of New York, County of Nassau captioned Shaun Moamem v. Steven Ostad (Index No.: 613457/2023) (the “COJ Action”) in which Defendant filed the Confession of Judgment. 40. Notwithstanding that the Confession of Judgment was invalid on its face, on August 22, 2023, the Clerk of the Court for Nassau County entered judgment against Plaintiff in the amount of $809,500.87 (the “Judgment”) in the COJ Action. FIRST CAUSE OF ACTION (Fraudulent Inducement) 41. Plaintiff repeats and realleges the foregoing paragraphs of the Complaint as if more fully set forth herein at length. 42. Defendant intended his extortionist threats to publicly defame Plaintiff to coerce Plaintiff to execute the Note, Amended and Restated Note, the Letter Agreement and the Confession of Judgment. 43. Defendant knew before and/or at the time Plaintiff executed the Amended and Restated Note that Plaintiff would never “receive back the new $400,000 in the form of equity distributions” from Grape Arbor. 8 9 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 44. Defendant knew that Plaintiff would justifiably rely upon the foregoing statements. 45. Plaintiff did rely on Defendant’s and his agent’s misrepresentations in signing the Note, Amended and Restated Note, Letter Agreement and Confession of Judgment. 46. Plaintiff suffered damages as a result of his reliance on Defendant’s material misrepresentations by, among other things, been coerced into admitting to a non-existent debt of $751,666.67 in the Confession of Judgment. 47. Defendant procured the Note, Amended and Restated Note, Letter Agreement and Confession of Judgment from Plaintiff through material misrepresentations, coercion, and duress, which in the absence of the material misrepresentations, coercion, and duress, Plaintiff would not have executed. 48. In light of the foregoing, Plaintiff is entitled to recission of the Note, Amended and Restated Note, Letter Agreement, and Confession of Judgment. SECOND CAUSE OF ACTION (Vacatur of Judgment pursuant to CPLR § 5015(a)(3)) 49. Plaintiff repeats and realleges the foregoing paragraphs of the Complaint as if more fully set forth herein at length. 50. Defendant utilized fraud, misrepresentation, or other misconduct in order to procure execution of the Note, the Amended and Restated Note and the Confession of Judgment. 51. In light of the foregoing, Plaintiff is entitled to vacatur of the Judgment pursuant to CPLR § 5015(a)(3). THIRD CAUSE OF ACTION (Vacatur of Judgment pursuant to CPLR § 5015(a)(4)) 52. Plaintiff repeats and realleges the foregoing paragraphs of the Complaint as if more fully set forth herein at length. 9 10 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 53. It is a statutory requirement that a confession of judgment state the county where the defendant resides. 54. It is a statutory requirement that a confession of judgment for a monetary judgment state the facts out of which the debt arose. 55. It is a statutory requirement that a confession of judgment for a monetary judgment be for a debt justly due or to become due. 56. The Confession of Judgment was invalid on its face because it was contradictory as to which county Defendant was permitted to file it. 57. The Confession of Judgment was invalid on its face because it did not state the facts out of which the purported debt therein arose. 58. The Confession of Judgment was invalid because it was not for a debt justly due or to become due. 59. Since Confession of Judgment was invalid on its face, the Clerk of the Court for Nassau County did not have jurisdiction to enter the Judgment. 60. In light of the foregoing, Plaintiff is entitled to vacatur of the Judgment pursuant to CPLR § 5015(a)(4). FOURTH CAUSE OF ACTION (Declaratory Judgment) 61. Plaintiff repeats and realleges the foregoing paragraphs of the Complaint as if more fully set forth herein at length. 62. The Note, Amended and Restated Note, Letter Agreement, and Confession of Judgment are documents which were procured by, among other things, coercion, material misrepresentations, and duress. 10 11 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 63. The Note, Amended and Restated Note, Letter Agreement, and Confession of Judgment are documents which were procured without consideration. 64. The Note, Amended and Restated Note and Confession of Judgment reflect an indebtedness which does not actually exist. 65. Plaintiff has been damaged by the Note, Amended and Restated Note, and Confession of Judgment, which was the basis of the entry of the Judgment against Plaintiff in the COJ Action. 66. The present dispute over the Note, Amended and Restated Note, Letter Agreement, and Confession of Judgment presents a justiciable controversy in which the issues are present, real, definite, and substantial and affect existing legal relations between Plaintiff and Defendant. 67. Without a declaration of rights, Plaintiff will continue to suffer harm from the Note, Amended and Restated Note, Letter Agreement and Confession of Judgment. 68. Plaintiff has no adequate remedy at law. 69. Accordingly, Plaintiff is entitled to a judgment declaring that (i) the Note, Amended and Restated Note, and Confession of Judgment do not represent an actual debt and, consequently, are void and unenforceable, and (ii) the Letter Agreement was procured as a result of misrepresentations, coercion, and distress, and therefore, void and unenforceable. WHEREFORE, Plaintiff demands judgment against Defendant as follows: (a) On his first cause of action, an Order rescinding the Note, Amended and Restated Note, Letter Agreement and Confession of Judgment; (b) On his second cause of action, an Order vacating the Judgment entered in this Court on August 22, 2023 under Index No.: 613457/2023; 11 12 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 (c) On his third cause of action, an Order vacating the Judgment entered in this Court on August 22, 2023 under Index No.: 613457/2023; (d) On his fourth cause of action, an Order declaring that the amounts purportedly due under the Note, Amended and Restated Note, and Confession of Judgment do not represent an actual debt, and that Note, Amended and Restated Note, Letter Agreement, and Confession of Judgment are void and unenforceable; (e) Such other and further relief as this Court deems just and proper. Dated: March 20, 2024 New York, New York RUKAB BRASH PLLC By: Jason Jacobs 50 West 17th Street, Suite 9-S New York, NY 10011 P. (212) 257-1960 Attorney for Plaintiff 12 13 of 14 FILED: NASSAU COUNTY CLERK 03/20/2024 06:14 PM INDEX NO. 604888/2024 DocuSign Envelope ID: ED09AD6A-DA61-45BC-BCB1-5FE3B7279CEC NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 03/20/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU STEVEN OSTAD, IIndex No.: Plaintiff, -against- VERIFICATION SHAUN MOAMEN, Defendant. __________________________________________ I, Steven Ostad, am the Plaintiff in the above-captioned action. I have read the foregoing Verified Complaint and know the contents thereof are true to my knowledge, except as to the matters which are stated to be alleged upon information and belief, and as to those matters, I believe them to be true. My knowledge and beliefs are based on my personal knowledge, and my files and records. 20th I affirm this day of March 2024, under the penalties of perjury under the laws of New York, which may include a fine or imprisonment, that the foregoing is true, and I understand that the foregoing may be used in an action or proceeding in a court of law. DocuSignedby: 14 of 14