Preview
FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023
NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024
SUPREME COURT OF THE STATE OF NEW YORK Motion #13
COUNTY OF NEW YORK
----------------------------------------------------------------------X
ERI/SNL 2015 HOLDINGS LLC, ERI/SNL 2017
HOLDINGS LLC, ERI/SNL 2018 HOLDINGS LLC, Index No.: 653695/2023
F2017 EMPLOYEE PARTICIPATION FUND LLC,
and F2018 EMPLOYEE PARTICIPATION FUND LLC,
Plaintiffs,
-against-
SNL DEVELOPMENT GROUP LLC, SNL
CAPITAL PARTNERS, LLC, SNL
CONSTRUCTION, LLC, SNL FUND LLC, and
MARC SHARINN,
Defendants.
----------------------------------------------------------------------X
MEMORANDUM OF LAW IN OPPOSITION TO ORDER TO SHOW CAUSE
SEEKING LEAVE TO SUBSTITUTE NEW PROPOSED SECOND AMENDED
COMPLAINT, NUNC PRO TUNC, FOR PREVIOUSLY FILED PROPOSED SAC
DAVID BOLTON, P.C.
666 Old Country Road, Suite 509
Garden City, New York 11530
(516) 222-0600
Attorneys for defendants
1 of 6
FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023
NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024
SUMMARY
Plaintiffs seek an order allowing them to substitute, nunc pro tunc, a “revised”
proposed second amended complaint (the “Substitute Proposed SAC”) in place of the
proposed SAC which is the subject of plaintiffs’ fully submitted motion for leave to
amend (the “Motion To Amend”), filed November 21, 2023 at NYSCEF # 94.
What plaintiffs actually are seeking, is leave to assert a brand new, substantive,
$1.7 million claim against defendants Marc Sharinn and SNL Construction, LLC without
allowing defendants the opportunity to be heard in opposition to that request.
Plaintiffs have not cited any provision in the CPLR which authorizes the Court to
substitute, nunc pro tunc, a new proposed amended pleading in the place of a previously
filed proposed amended pleading; especially after the motion has been marked fully
submitted.
As plaintiffs recognize, their recourse is to withdraw the Motion to Amend and file
a motion which seeks leave to assert all of the claims they intend to assert. Defendants,
then, will have an opportunity to respond to that motion, including opposing an attempt to
assert a new $1.7 million claim against Marc Sharinn and SNL Construction, LLC.
ARGUMENT
If plaintiffs’ motion is granted, defendants Sharinn and SNL Construction will be
prejudiced because they will be deprived of fundamental due process rights, including the
opportunity to be heard on the plaintiffs’ application to assert a claim against them which
seeks to recover $1.7 million in damages. See Substitute Proposed SAC, NYSCEF # 158
2 of 6
FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023
NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024
at ¶¶ 68 (“SNL’s Fraud”), 129 (“ERI’s damages”), 162 (fraudulent inducement), 184
(unjust enrichment).
There can be no dispute that notice and an opportunity to be heard are the
“cornerstone of due process.” See McGregor v. McGregor, 191 A.D.3d 974 (2nd Dep’t
2021).
Plaintiffs filed their Motion To Amend on November 21, 2023. NYSCEF # 94.
In that motion, plaintiffs seek leave to file a specific proposed Second Amended
Complaint (the “SAC”) which adds new plaintiffs, a new defendant, and new causes of
action. Id.
Defendants opposed that motion; including opposing leave to amend to add
specific claims on the grounds that such claims were palpably insufficient. See NYSCEF
# 106.
The Substitute Proposed SAC seeks to assert a new claim against defendants Marc
Sharinn and SNL Construction, LLC and seeks to recover $1.7 million. See NYSCEF #
158 at ¶ 68.
While the new claim is not well-defined in the Substitute Proposed SAC, it
appears that plaintiffs are arguing that defendants Marc Sharinn and SNL Construction,
LLC committed fraud when they failed to disclose to unspecified plaintiffs that SNL
Construction, LLC had applied for, and received, “PPP loans.” See NYSCEF # 158 at ¶
68.1
1
According to plaintiffs’ Memorandum of Law, the reference to “PPP loans” is to
the Paycheck Protection Program instituted during the Covid crisis.
2
3 of 6
FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023
NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024
If plaintiffs had included this claim in the current proposed SAC, defendants
Sharinn and SNL Construction, LLC would have opposed on the grounds that this claim
is palpably insufficient; including but not limited to the argument that no facts have been
pled which would support a claim that defendants Sharinn and/or SNL Construction, LLC
owed a duty to disclose receipt of “PPP loans.” The Court’s power to deny a motion for
leave to amend in such circumstances cannot be disputed. See, e.g., Sehera Food
Services Inc. v. Empire State Building Company L.L.C., 74 A.D.3d 542 (1st Dep’t 2010),
affirming denial of leave to amend because proposed amendment seeking to allege
fraudulent concealment was not viable because there was no duty to disclose.
Simply put, because the Motion To Amend has been marked fully submitted, if the
relief plaintiffs seek is granted, defendants Sharinn and SNL Construction will be
deprived of the opportunity to raise arguments in opposition to the plaintiffs’ request for
leave to amend to add a brand new $1.7 million claim.
Accordingly, plaintiff’s application should be denied.
CONCLUSION
For the foregoing reasons, it is requested that the plaintiffs’ motion be denied in its
3
4 of 6
FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023
NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024
entirety.
Dated: Garden City, New York
April 2, 2024
DAVID BOLTON, P.C.
By:___/s/ David Bolton_________
David Bolton, Esq.
666 Old Country Road, Suite 509
Garden City, New York 11530
(516) 222-0600
Attorneys for defendants
4
5 of 6
FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023
NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024
CERTIFICATION
The undersigned certifies that the foregoing consists of 1868 words.
Dated: Garden City, New York
April 2, 2024
_/s/ David Bolton____
5
6 of 6
Preview
FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023 NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024 SUPREME COURT OF THE STATE OF NEW YORK Motion #13 COUNTY OF NEW YORK ----------------------------------------------------------------------X ERI/SNL 2015 HOLDINGS LLC, ERI/SNL 2017 HOLDINGS LLC, ERI/SNL 2018 HOLDINGS LLC, Index No.: 653695/2023 F2017 EMPLOYEE PARTICIPATION FUND LLC, and F2018 EMPLOYEE PARTICIPATION FUND LLC, Plaintiffs, -against- SNL DEVELOPMENT GROUP LLC, SNL CAPITAL PARTNERS, LLC, SNL CONSTRUCTION, LLC, SNL FUND LLC, and MARC SHARINN, Defendants. ----------------------------------------------------------------------X MEMORANDUM OF LAW IN OPPOSITION TO ORDER TO SHOW CAUSE SEEKING LEAVE TO SUBSTITUTE NEW PROPOSED SECOND AMENDED COMPLAINT, NUNC PRO TUNC, FOR PREVIOUSLY FILED PROPOSED SAC DAVID BOLTON, P.C. 666 Old Country Road, Suite 509 Garden City, New York 11530 (516) 222-0600 Attorneys for defendants 1 of 6 FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023 NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024 SUMMARY Plaintiffs seek an order allowing them to substitute, nunc pro tunc, a “revised” proposed second amended complaint (the “Substitute Proposed SAC”) in place of the proposed SAC which is the subject of plaintiffs’ fully submitted motion for leave to amend (the “Motion To Amend”), filed November 21, 2023 at NYSCEF # 94. What plaintiffs actually are seeking, is leave to assert a brand new, substantive, $1.7 million claim against defendants Marc Sharinn and SNL Construction, LLC without allowing defendants the opportunity to be heard in opposition to that request. Plaintiffs have not cited any provision in the CPLR which authorizes the Court to substitute, nunc pro tunc, a new proposed amended pleading in the place of a previously filed proposed amended pleading; especially after the motion has been marked fully submitted. As plaintiffs recognize, their recourse is to withdraw the Motion to Amend and file a motion which seeks leave to assert all of the claims they intend to assert. Defendants, then, will have an opportunity to respond to that motion, including opposing an attempt to assert a new $1.7 million claim against Marc Sharinn and SNL Construction, LLC. ARGUMENT If plaintiffs’ motion is granted, defendants Sharinn and SNL Construction will be prejudiced because they will be deprived of fundamental due process rights, including the opportunity to be heard on the plaintiffs’ application to assert a claim against them which seeks to recover $1.7 million in damages. See Substitute Proposed SAC, NYSCEF # 158 2 of 6 FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023 NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024 at ¶¶ 68 (“SNL’s Fraud”), 129 (“ERI’s damages”), 162 (fraudulent inducement), 184 (unjust enrichment). There can be no dispute that notice and an opportunity to be heard are the “cornerstone of due process.” See McGregor v. McGregor, 191 A.D.3d 974 (2nd Dep’t 2021). Plaintiffs filed their Motion To Amend on November 21, 2023. NYSCEF # 94. In that motion, plaintiffs seek leave to file a specific proposed Second Amended Complaint (the “SAC”) which adds new plaintiffs, a new defendant, and new causes of action. Id. Defendants opposed that motion; including opposing leave to amend to add specific claims on the grounds that such claims were palpably insufficient. See NYSCEF # 106. The Substitute Proposed SAC seeks to assert a new claim against defendants Marc Sharinn and SNL Construction, LLC and seeks to recover $1.7 million. See NYSCEF # 158 at ¶ 68. While the new claim is not well-defined in the Substitute Proposed SAC, it appears that plaintiffs are arguing that defendants Marc Sharinn and SNL Construction, LLC committed fraud when they failed to disclose to unspecified plaintiffs that SNL Construction, LLC had applied for, and received, “PPP loans.” See NYSCEF # 158 at ¶ 68.1 1 According to plaintiffs’ Memorandum of Law, the reference to “PPP loans” is to the Paycheck Protection Program instituted during the Covid crisis. 2 3 of 6 FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023 NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024 If plaintiffs had included this claim in the current proposed SAC, defendants Sharinn and SNL Construction, LLC would have opposed on the grounds that this claim is palpably insufficient; including but not limited to the argument that no facts have been pled which would support a claim that defendants Sharinn and/or SNL Construction, LLC owed a duty to disclose receipt of “PPP loans.” The Court’s power to deny a motion for leave to amend in such circumstances cannot be disputed. See, e.g., Sehera Food Services Inc. v. Empire State Building Company L.L.C., 74 A.D.3d 542 (1st Dep’t 2010), affirming denial of leave to amend because proposed amendment seeking to allege fraudulent concealment was not viable because there was no duty to disclose. Simply put, because the Motion To Amend has been marked fully submitted, if the relief plaintiffs seek is granted, defendants Sharinn and SNL Construction will be deprived of the opportunity to raise arguments in opposition to the plaintiffs’ request for leave to amend to add a brand new $1.7 million claim. Accordingly, plaintiff’s application should be denied. CONCLUSION For the foregoing reasons, it is requested that the plaintiffs’ motion be denied in its 3 4 of 6 FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023 NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024 entirety. Dated: Garden City, New York April 2, 2024 DAVID BOLTON, P.C. By:___/s/ David Bolton_________ David Bolton, Esq. 666 Old Country Road, Suite 509 Garden City, New York 11530 (516) 222-0600 Attorneys for defendants 4 5 of 6 FILED: NEW YORK COUNTY CLERK 04/02/2024 11:36 AM INDEX NO. 653695/2023 NYSCEF DOC. NO. 163 RECEIVED NYSCEF: 04/02/2024 CERTIFICATION The undersigned certifies that the foregoing consists of 1868 words. Dated: Garden City, New York April 2, 2024 _/s/ David Bolton____ 5 6 of 6