On July 26, 2013 a
Motion-Secondary
was filed
involving a dispute between
Brandsway Hospitality, Llc A K A Brandsway Hospitality,
Indiefork Llc,
Matthew Levine,
and
133 Essex Restaurant, Llc A K A Sons Of Essex,
1356 Restaurant Llc A K A Petaluma Restaurant,
170 Mercer Restaurant Llc,
19 Stanton Restaurant, Llc A K A Cocktail Bodega A K A Cocktail Bodega Underground,
19 Stanton Street, Llc,
58-60 Ninth Realty Llc,
61 Gans Restaurant Llc,
69 Gansevoort Restaurant, Inc.,
Black Label Residential Llc,
Delshah 60 Ninth, Llc,
Delshah 60 Ninth Manager, Llc,
Delshah Capital, Llc,
Delshah Gansevoort 69, Llc,
Delshah Management, Llc,
Gansevoort 69 Llc,
Griffon 1356 Llc,
Griffon 19 Stanton Llc,
Griffon 55 Gans Llc,
Griffon Gansevoort Holdings, Llc,
Griffon Gans, Llc,
Griffon Gans Manager, Llc,
Griffon Holdings, Llc,
Griffon Investment Group, Llc,
Griffon Investment Holdings, Llc,
Griffon Investment, Llc,
Griffon Management, Llc,
Griffon Q, Llc,
Indiefork Hospitality Llc,
James Choung,
Jcny, Llc,
John Doe #1 Through #10,
Jpmorgan Chase & Co.,
Michael K. Shah,
Moon 170 Mercer, Inc.,
Paychex, Inc.,
V Global Holdings Inc.,
Victor Jung,
for Commercial (General)
in the District Court of New York County.
Preview
FILED: NEW YORK COUNTY CLERK 10/09/2014 10:44 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 223 RECEIVED NYSCEF: 10/09/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
--------------------------------------------------------------------X
BRANDSWAY HOSPITALITY, LLC a/k/a Index No. 652637/2013
BRANDSWAY HOSPITALITY, INDIEFORK
LLC and MATTHEW LEVINE,
Plaintiffs, Reply Affirmation in Support of
Motion to Dismiss
-against-
(Hon. Shlomo S. Hagler)
DELSHAH CAPITAL, LLC, DELSHAH
MANAGEMENT, LLC, MICHAEL K. SHAH,
VICTOR JUNG, V GLOBAL HOLDINGS INC., 133
ESSEX RESTAURANT, LLC a/k/a SONS OF ESSEX,
BLACK LABEL RESIDENTIAL LLC, 19 STANTON
STREET LLC, 19 STANTON RESTAURANT, LLC
a/k/a COCKTAIL BODEGA a/k/a COCKTAIL
BODEGA UNDERGROUND, 61 GANS
RESTAURANT LLC, GRIFFON GANSEVOORT
HOLDINGS, LLC, , GRIFFON 1356 LLC, 1356
RESTAURANT LLC a/k/a PETALUMA
RESTAURANT, 170 MERCER RESTAURANT LLC,
MOON 170 MERCER, INC., 58-60 NINTH REALTY
LLC, GANSEVOORT 69 LLC, DELSHAH
GANSEVOORT 69, LLC, 69 GANSEVOORT
RESTAURANT, INC., DELSHAH 60 NINTH, LLC,
DELSHAH 60 NINTH MANAGER, LLC,
INDIEFORK HOSPITALITY LLC, JAMES CHOUNG,
JCNY, LLC., JPMORGAN CHASE & CO. and JOHN
DOE #1 through #10,
Defendants
JOHN DOE #1 through #10 are fictitious and unknown
to the plaintiffs, the person or parties intended being the
persons or parties, if any, having or claiming an
ownership interest in any of the defendant companies or
the real property in which they are situated but whose
identity is not known.
-----------------------------------------------------------------------X
Lorenzo A. DeLuca, an attorney duly admitted to practice before the courts of the state of
New York affirms the following under penalties of perjury:
1. I am the attorney for defendants, James Choung, JCNY LLC. and V Global Holdings
Inc. (the “Employee Defendants”). I make this reply affirmation in further support of my clients’
motion to dismiss the Second Amended Complaint herein pursuant to CPLR 3211.
2. Plaintiff’s opposition does not dispute the essential facts. Clearly defendant James
Choung is a member and manager of Brandsway Hospitality LLC (“Brandsway”) who did not
consent to the commencement of the lawsuit or retention of counsel. Nor does Plaintiff challenge
the terms, the accuracy or the authenticity of the Operating Agreement. While Plaintiff taunts the
opposition for having failed to attach a signed version of the Operating Agreement there is no denial
of its existence and no production of any amended or superceding agreement.
3. Despite the term Operating Agreement there is no requirement in the New York
Limited Liability Company Law (the “LLCL”) that the Agreement be executed. Section 417 of
the LLCL reads as follows: “Subject to the provisions of this chapter, the members shall adopt a
written operating agreement ….” Similar to the By-Laws of a business corporation an Operating
Agreement is adopted by action of the members.
4. The authority of Plaintiff to sue is not dependent on the interpretation or even the
existence of Section 5.4 (a). Section 5.4 (a) merely restates the provisions of the LLCL. Here it is
undisputed that both Levine and Choung are the managers of Brandsway. LLCL § 408 provides
“the managers shall manage the limited liability company by an affirmative vote of the managers.”
With only two managers Levine could not move forward to expend Brandsway resources with the
affirmative vote of his co-manager Choung.
5. Interpreting the Agreement to exclude the possibility of a shareholder/manager suing
a co-shareholder/ manager may seem unreasonable or illogical to Plaintiff but that is exactly what
the LLCL requires. Moreover it is completely consistent with long established common law. In
2
Sterling Indus., Inc. v. Ball Bearing Pen Corp., 298 N.Y. 483, 84 N.E.2d 790 (1949) the Court of
Appeals stated the rule as follows:
“We have consistently held that section 27 of the General Corporation Law,
which provides that the business of a corporation shall be managed by its board of
directors, cannot be circumvented. Long Park, Inc., v. Trenton-New Brunswick
Theatres Co., 297 N.Y. 174, 77 N.E.2d 633;Benintendi v. Kenton Hotel, Inc., 294
N.Y. 112, 60 N.E.2d 829, 159 A.L.R. 280;McQuade v. Stoneham, 263 N.Y. 323, 189
N.E. 234;Manson v. Curtis, 223 N.Y. 313, 119 N.E. 559, Ann.Cas. 1918E, 247. The
decision below in effect amends section 27 to read that the corporation shall be
managed by its board of directors, except in the case of deadlock when it shall be
managed by any director who happens to be president.”
Similarly in Crane v. 206 West 41st St. Hotel Associates, 87 A.D.3d 174 (1st Dept.
2011) relied on Sterling to prevent one with 50% control from even interposing a defense in
a lawsuit without the consent of the other 50%. The managers of an LLC are the equivalent
of the Board of Directors. An affirmative vote by the managers to authorize the lawsuit
could not have been circumvented.
6. Accordingly the plaintiff Brandsway clearly lacks the capacity to bring this action
and the action against all defendants must be dismissed.
____Lorenzo A. DeLuca_
Dated: New York, New York Lorenzo A. Deluca, Esq.
October 8, 2014 114 East 13th Street, Front 1
New York, New York 10013
Telephone No.: (917) 522-6791
Attorneys for Defendants
James Choung, JCNY, Inc and
V Global Holdings Inc.
3
Preview
FILED: NEW YORK COUNTY CLERK 10/09/2014 10:44 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 223 RECEIVED NYSCEF: 10/09/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK --------------------------------------------------------------------X BRANDSWAY HOSPITALITY, LLC a/k/a Index No. 652637/2013 BRANDSWAY HOSPITALITY, INDIEFORK LLC and MATTHEW LEVINE, Plaintiffs, Reply Affirmation in Support of Motion to Dismiss -against- (Hon. Shlomo S. Hagler) DELSHAH CAPITAL, LLC, DELSHAH MANAGEMENT, LLC, MICHAEL K. SHAH, VICTOR JUNG, V GLOBAL HOLDINGS INC., 133 ESSEX RESTAURANT, LLC a/k/a SONS OF ESSEX, BLACK LABEL RESIDENTIAL LLC, 19 STANTON STREET LLC, 19 STANTON RESTAURANT, LLC a/k/a COCKTAIL BODEGA a/k/a COCKTAIL BODEGA UNDERGROUND, 61 GANS RESTAURANT LLC, GRIFFON GANSEVOORT HOLDINGS, LLC, , GRIFFON 1356 LLC, 1356 RESTAURANT LLC a/k/a PETALUMA RESTAURANT, 170 MERCER RESTAURANT LLC, MOON 170 MERCER, INC., 58-60 NINTH REALTY LLC, GANSEVOORT 69 LLC, DELSHAH GANSEVOORT 69, LLC, 69 GANSEVOORT RESTAURANT, INC., DELSHAH 60 NINTH, LLC, DELSHAH 60 NINTH MANAGER, LLC, INDIEFORK HOSPITALITY LLC, JAMES CHOUNG, JCNY, LLC., JPMORGAN CHASE & CO. and JOHN DOE #1 through #10, Defendants JOHN DOE #1 through #10 are fictitious and unknown to the plaintiffs, the person or parties intended being the persons or parties, if any, having or claiming an ownership interest in any of the defendant companies or the real property in which they are situated but whose identity is not known. -----------------------------------------------------------------------X Lorenzo A. DeLuca, an attorney duly admitted to practice before the courts of the state of New York affirms the following under penalties of perjury: 1. I am the attorney for defendants, James Choung, JCNY LLC. and V Global Holdings Inc. (the “Employee Defendants”). I make this reply affirmation in further support of my clients’ motion to dismiss the Second Amended Complaint herein pursuant to CPLR 3211. 2. Plaintiff’s opposition does not dispute the essential facts. Clearly defendant James Choung is a member and manager of Brandsway Hospitality LLC (“Brandsway”) who did not consent to the commencement of the lawsuit or retention of counsel. Nor does Plaintiff challenge the terms, the accuracy or the authenticity of the Operating Agreement. While Plaintiff taunts the opposition for having failed to attach a signed version of the Operating Agreement there is no denial of its existence and no production of any amended or superceding agreement. 3. Despite the term Operating Agreement there is no requirement in the New York Limited Liability Company Law (the “LLCL”) that the Agreement be executed. Section 417 of the LLCL reads as follows: “Subject to the provisions of this chapter, the members shall adopt a written operating agreement ….” Similar to the By-Laws of a business corporation an Operating Agreement is adopted by action of the members. 4. The authority of Plaintiff to sue is not dependent on the interpretation or even the existence of Section 5.4 (a). Section 5.4 (a) merely restates the provisions of the LLCL. Here it is undisputed that both Levine and Choung are the managers of Brandsway. LLCL § 408 provides “the managers shall manage the limited liability company by an affirmative vote of the managers.” With only two managers Levine could not move forward to expend Brandsway resources with the affirmative vote of his co-manager Choung. 5. Interpreting the Agreement to exclude the possibility of a shareholder/manager suing a co-shareholder/ manager may seem unreasonable or illogical to Plaintiff but that is exactly what the LLCL requires. Moreover it is completely consistent with long established common law. In 2 Sterling Indus., Inc. v. Ball Bearing Pen Corp., 298 N.Y. 483, 84 N.E.2d 790 (1949) the Court of Appeals stated the rule as follows: “We have consistently held that section 27 of the General Corporation Law, which provides that the business of a corporation shall be managed by its board of directors, cannot be circumvented. Long Park, Inc., v. Trenton-New Brunswick Theatres Co., 297 N.Y. 174, 77 N.E.2d 633;Benintendi v. Kenton Hotel, Inc., 294 N.Y. 112, 60 N.E.2d 829, 159 A.L.R. 280;McQuade v. Stoneham, 263 N.Y. 323, 189 N.E. 234;Manson v. Curtis, 223 N.Y. 313, 119 N.E. 559, Ann.Cas. 1918E, 247. The decision below in effect amends section 27 to read that the corporation shall be managed by its board of directors, except in the case of deadlock when it shall be managed by any director who happens to be president.” Similarly in Crane v. 206 West 41st St. Hotel Associates, 87 A.D.3d 174 (1st Dept. 2011) relied on Sterling to prevent one with 50% control from even interposing a defense in a lawsuit without the consent of the other 50%. The managers of an LLC are the equivalent of the Board of Directors. An affirmative vote by the managers to authorize the lawsuit could not have been circumvented. 6. Accordingly the plaintiff Brandsway clearly lacks the capacity to bring this action and the action against all defendants must be dismissed. ____Lorenzo A. DeLuca_ Dated: New York, New York Lorenzo A. Deluca, Esq. October 8, 2014 114 East 13th Street, Front 1 New York, New York 10013 Telephone No.: (917) 522-6791 Attorneys for Defendants James Choung, JCNY, Inc and V Global Holdings Inc. 3