Preview
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
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,
-against-
DELSHAH CAPITAL LLC, MICHAEL K. SHAH,
and VICTOR JUNG
Defendants.
____ ___ ___ __ ______ ___________--------X
DEFENDANTS'
MEMORANDUM OF LAW IN OPPOSITION
PLAINTIFFS'
TO MOTION TO AMEND OR REARGUE
and
DEFENDANTS'
IN SUPPORT OF CROSS-MOTION FOR
ATTORNEYS'
FEES AND SANCTIONS AND TO COMPEL
Dated: March 29, 2019
Garden City, New York
Cordova & Schwartzman, LLP
Attorneys for Defendants
DELSHAH CAPITAL LLC, MICHAEL K. SHAH
666 Old Country Road, Suite 700
Garden City, New York 11530
(516)741-0070
1 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
INTRODUCTION
Defendants DELSHAH CAPITAL LLC ("Delshah Capital") and MICHAEL K.
SHAH ("Shah") (Shah and/or Delshah Capital are collectively referred to as "Delshah")
Plaintiffs'
respectfully submit this memorandum of law in opposition to motion for leave
to file a Third Amended Complaint or for leave to reargue, and in support of Delshah's
attorneys'
cross-motion for fees and costs and to compel Plaintiffs to comply with the
Court's disclosure Order.
Plaintiffs'
As demonstrated below, motion is predicated upon (1) outright
Plaintiffs'
fabrications such as newly minted claim that the money Plaintiffs stole from
Sons of Essex ("SoE") was money due Levine from another restaurant, (2) judicially
admitted lies such as Levine's statement that he isand always was a 50% owner of SoE,
and (3) outrageous accusations such as the accusation that James Choung, and Victor
Jung, both Asian-Americans, impersonated Matthew Levine's likeness.
Moreover, while specifically representing to this Court that they are not adding
additional claims to the action, Plaintiffs surreptitiously seek to add two additional claims
in their Third Amended Complaint! Worse, these additional claims are claims that were
previously asserted by Plaintiffs, and that were dismissed with prejudice by this Court,
As difficult as it isto write, what Plaintiffs have presented to this Court herein is
more than just misleading, itis nothing less than a fraud on the Court. Delshah should not
have to bear the cost of opposing this motion due to such egregious behavior and
attorneys'
Plaintiffs should be directed to pay Delshah's fees and costs for having to
oppose this baseless motion.
2 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
Compounding their outrageous behavior, Plaintiffs again submit to the Court an
email in support of their motion which was deleted from James Choung's
SonsofEssexLES email account. This proves again that Plaintiffs deliberately deleted
emails but only after first saving those emails elsewhere. Plaintiffs have spoliated
evidence, and then use that same evidence to advance their case.
PRELIMINARY STATEMENT
This action arises from a restaurant management agreement entered into between
Plaintiff Brandsway Hospitality LLC ("Brandsway") and Delshah Capital LLC (the
"Agreement") by which Brandsway would operate Delshah's restaurant SoE. The
Agreement provided, inter alia, that Delshah Capital could terminate Brandsway in the
event of theft or dishonesty by Brandsway, or in the event that the restaurant failed to
repay certain loans with interest and also redeem a certain amount of Delshah's preferred
equity with interest within a specified time period, or if Brandsway took an action that
subjected the restaurant's liquor license to sanction.
It isbeyond dispute that Plaintiffs stole from SOE: Delshah presented proof of
Plaintiffs'
theft from Sons of Essex, which served as a basis to terminate Brandsway for
cause, however, Plaintiffs completely ignored Delshah's evidence despite the fact that
they submitted a 37 page affidavit in opposition to Delshah's motion. Having failed to
refute Delshah's evidence, Plaintiffs now manufacture a story to justify their theft.
However, their new story is a complete fabrication easily disproved by their own
admissions, and, interestingly, ithas nothing to do with the relief that they seek from the
Court on this motion.
2
3 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
Similarly, itis beyond dispute that Delshah's loan, preferred equity, and interest
were not repaid as required by the Agament, and, in fact, by email dated January 23,
2013, after the dates these payments were required to be made pursuant to the
Agrccment, Plaintiff Matthew Levine ("Levine") acknowledges that the amounts have
back."
not been repaid, writing "I want him [Shah] to be paid A copy of said email is
annexed hereto as Exhibit O.
In July 2018, Plaintiff moved for summary judgment on liability, asserting only
metrics"
that Brandsway met the required "financial even though these sums were not
paid to Delshah. Delshah cross-moved to dismiss the two remaining causes of action, for
breach of contract and for fraud. Delshah further cross-moved to strike the complaint for
Plaintiffs'
admitted spoliation of evidence (Plaintiffs admitted that emails were deleted
Plaintiffs'
after Plaintiffs had printed the emails) and for refusal to comply with the
Court's discovery Orders. In the alternative, Delshah moved to compel Plaintiffs to
comply with the Court's discovery Orders.
By Decision and Order on Motion dated February 4, 2019, the Court granted
Plaintiffs'
Delshah's cross-motion dismissing fraud cause of action, but denied Delshah's
cross-motion to dismiss the breach of contract cause of action. The Court granted
Delshah's motion to strike the complaint to the extent of directing that an expert review
Plaintiffs'
the server in possession to determiñc when the emails were deleted. A copy of
the Court's February 4, 2019 Decision and Order on Motion and the relevant portions of
the transcript from the oral arguments (collectively, the "SJ Order") are annexed hereto as
Exhibit A. The Court did not decide Delshah's motion to compel Plaintiffs to comply
with the Court's discovery Orders.
3
4 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
Plaintiffs now move to amend the Second Amended Complaint that they filed in
2014, and they offer a proposed Third Amended Complaint. Shockingly, Plaintiffs claim
that "[b]y the third amended cerñplaiñt Plaintiff's [sic] merely seek to remove from the
Second Amended Complaint those parties dismissed from the action and those causes of
action which have either been dismissed or withdrawn. Affirmation of Thomas B Decea,
Esq., dated February 21, 2019 (the "Decea Aff."), ¶4. Plaintiffs further claim that "[b]y
the relief requested herein, neither the substance nor procedural posture of this case will
affected."
be Decea Aff., $4. Plaintiffs also state that "[t]he amendment sought does not
seek to add new causes of action or alter the facts upon which the causes of action are
based." Plaintiffs'
Memorandum of Law in Support ("Plt's MoL"), page 2.
However, these statements are demonstrably dishonent, based upon a simple
comparison of the Court's prior Order dismissing certain claims and causes of action, the
Plaintiffs'
Second Amended Complaint, and proposed Third Amended Complaint. In
fact, the Court should note that, despite their specific statements to the contrary, Plaintiffs
seek to surreptitiously add additional claims to this action, including claims that were
specifically dismissed by this Court on motion by Order dated August 6. 2015 (the
"Dismissal Order"). A copy of the Dismissal Order with the relevant portions of the
transcript from the oral argument is annexed hereto as Exhibit B; see also, NYSCEF Doc
No. 275. Plaintiffs are attempting a fraud on the Court.
Plaintiffs'
Nonetheless, motion fails as a matter of law for a number of reasons,
including (1) the law of the case doctrine, (2) the failure to state a claim, and (3) that the
claims are predicated on admittedly false allegations. In addition, due to the egregious
Plaintiffs'
nature of dishonesty, and the fact that Plaintiffs seek to add claims that were
4
5 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
previously dissilssed with prejudice on motion-while specifically denying that they are
so-- attorneys'
doing Delshah cross-moves for an award of fees and sanctions, and further
moves to compel Plaintiffs to respond to previously propounded discovery domsids as
per the Court's prior discovery Order.
FACTS
The facts set forth herein are based upon the affidavits of Michael Shah, sworn to
October 10, 2018 (the "Shah Aff.") (NYSCEF Doc. No. 439) and James Choung, sworn
to October 10, 2018 (the "Choung October Aff.") (NYSCEF Doc. No. 440), both of
Plaintiffs'
which were submitted in opposition to summary judgment motion and in
support of Delshah's cross-motion for summary judgment. For the Court's convenience,
copies of the Shah Aff. and the Choung October Aff. are annexed hereto as Exhibit E and
Exhibit G, respectively. Mr. Shah and Mr. Choung also submit affidavits on this motion.
L Sons of Essex.
In or about November, 2010, Michael Shah's company, non-party Black Label
Residential LLC, purchased the retail condominium space located at 133 Essex Street in
Manhattan. Shah Aff., $3; Ex E (NYSCEF Doc. No. 439). At that time, the space was
occupied by a bar named "Mason Dixon". Shah formed 133 Essex Restaurant, LLC
which purchased Mason Dixon's assets, including its liquor license, for $300,000 funded
entirely by Shah. Shah then decided to open a restaurant at the property, and between
loans and direct capital contributions, Shah spent well in excess of one ($1,000,000.00)
million dollars building the restaurant operated by 133 Essex Restaurant, LLC known as
Essex"
"Sons of ("SoE"). Plaintiffs did not contribute any monev to SoE or make any
financial contribution to SoE.
6 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
Shah decided to hire a manager for SoE, and he hired Brandsway to operate the
restaurant. Accordingly, Delshah entered into a Management and Operations Agreement
(the "Agreement") with Brandsway dated March 9, 2011. A copy of the Agreement is
annexed hereto as Exhibit J; NYSCEF Doc. No 411. Pursuant to the terms of the
Agreement, Delshah hired Brandsway "to operate and manage the Restaurant for the
year,"
accoüñt of, and on behalf of, [Delshah] on an exclusive basis for one but subject to
termination in the event of theft or dishonesty, for failure to achieve certain minimum
financial perforniañce, or if Brandsway allowed any actions that potantidy subjected
SoE's liquor license to sanction by the New York State Liquor Authority (the "SLA").
As part of the Management Agreement, Brandsway, no_t Levine, would earn a
25% ownership interest in SoE, upon the repayment of monies invested Dekhah
by
Indeed, in the Second Amended Complaint, Plaintiffs specifically admit that"[u]nder the
percentl
Management and Operations Agreement, Brsñ Jswãÿ was a thirty-five (35%)
owner of Sons of Essex, which ownership interest would vest upon the reoarment of_a
h . ..
."
SAC; 155; Ex. C (emphasis added). Thus, as Plaintiffs admit that the
ownership interest would vest solely upon the paymcñt of Delshah's investment, and as
Delshah was never repaid the investment monies, Brandsway's interest never vested.
After Delshah discovered multiple acts of theft and dishonesty by Plaintiffs; after
the required financial metrics were not achieved; and after Brandsway allowed certain
actions that subjected SoE's liquor license to sanction, by letter dated April 24, 2013,
I Delshahdisputes that was a 35% member of theentity. In as setforth
Braiidsway addition, below,
Plaintiffshave judiciallyasillit-:dbefore the Honorable O. Peter Sherwood, J.S.C.,that Brandsway was not
a 35% member ofSoE.
6
7 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
Delshah terminated the Agreement for cause (the "Termination Letter"). A copy of the
Termination Letter is annexed hereto as Exhibit F.
Unfortunately, Levine refused to accept Brandsway's termiñation, and he set out
"fired"
to destroy SoE. Levine first went to SoE where he employees, and worse, he tried
to steal SoE's liquor license, which would have effectively put SoE out of business!
Shah Aff., ¶8; Ex E. The liquor license was originally an asset of Mason Dixon, the
previous tenant, which Shah bought for $300,000, without any monetary contribution by
Plaintiffs. Fortunately, the police prcycnted Levine from leaving SoE and removing the
liquor license.
Given Levine's actions, Delshah filed the action entitled 133 Essex Restaurant,
LLC v. Brandsway Hospitality, Supreme Court, New York County, Index No.
Action").2
651629/2013 (the "Related On May 6, 2013, the Honorable O. Peter
Sherwood, J.S.C. granted Delshah a restraiñiñg order against Levine restraining him from
returning to SoE. A copy of the relevant portions of the transcript from the oral
arguments before Justice Sherwood (the "TRO Transcript") are annexed hereto as Exhibit
K. This restraining order remains in effect currently, as Plaintiffs have not been involved
in any way with SoE in nearly six years.
Thereafter, continuing his plan to destroy SoE, Levine filed a complaint with the
SLA, asserting that there had occurred serious SLA violations at SoE, but all of the
alleged violations occurred while Brandsway was mañaging SoE. Clearly, Levine
earth"
decided to use "scotched tactics in the hope of destroying SoE. After Levine filed
2 from same before the
The Related Action arises the factsand the Agrccmcñt and is cüñêñtly pcñdiñg
Court.
7
8 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
his accusations, SoE was subject to a full investigation by the SLA because of these
sanction."
accusations, and SoE's liquor license was "subject to
II. The motions to vacate the Notices of Peñdêñcy and to dismiss/correct
the pleadings.
On July 26, 2013, rather than filing a counter-claim in the Related Action,
Plaintiffs coñüñcñced this action by filing a 240 page prolix Complaint against Delshah,
Shah, and forty-plus other parties, including almost every entity Shah has an interest in,
regardless of whether Plaintiffs had any dealings with those entities. Plaintiffs sought 20
million dollars in damages arising from Brandsway's 18 month or so tenure! Worse,
Plaintiffs filed a number of Notices of Pendency against certain properties owned by
Shah's companies, even though Plaintiffs had no claim to those real properties.
Thus, Delshah moved to vacate and strike the Notices of Pendency, which motion
Court.3
was granted by the Next, because the first filed Complaint contained multiple
statements of fact, evidentistry material, and scandalous and outrageous allegations not
relevant to the instant matter, Delshah moved to strike it.However, prior to the return
date of the motion, Plaintiffs filed an Amended Complaint. Nonetheless, because the
Amended Complaint similarly failed to comply with the rules of pleading, Delshah
moved to strike the Amended Complaiñt. On May 12, 2014, the Court granted the
"unanswerable."4
motion, finding the Amended Complaint to be
III. The motions to dismiss.
Thereafter, Plaintiffs filed a fifty page Second Amended Complaint (the "SAC")
containing twenty-two causes of action against twenty-five or so defendants, including
3 NYSCEF Doc No. 120.
4 NYSCEF Doc No. 168.
8
9 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
claims for fraud, conversion and breach of fiduciary duty! A copy of the Second
Amended Complaint is annexed hereto as Exhibit C. These claims are based upon the
same allegations Plaintiffs now include in their proposed Third Amended Complaiñt (the
"Proposed TAC"). A copy of the proposed Third Amended Complaint is annexed hereto
as Exhibit D.
After Plaintiffs filed the Second Amended Delshah and the co-
Complaint,
defendants moved to dismiss the Second Amended Complaint in whole or in part. By
Order dated August 6, 2015, the Court granted the motion in part (the "Dismissal
Plaintiffs'
Order"). Critically, fraud claims based upon, inter alia, the alleged forgery of
Levine's signature and the use of his social security number were dismissed witl1
Plaintiffs'
prejudice. The Court also dismissed claims for conversion and breach of
fiduciary duty with prejudice. See, Ex. B. Despite these specific dismissah, Plaintiffs
seek to reassert these claims in their Proposed Third Amended Cornplair.t, under the
pretense that they "merely seek to remove....those parties from the action and those
withdrawn."
causes of action which have either been dismissed or
IV. Plaintiffs spoliate evidence.
Thereafter, discovery commenced, but Plaintiffs refused to provide certain critical
disclosure, and they continually failed to provide access to the email computer server
"sonsofessexLES.com"
hosting the emails relating to SoE, in the email accounts (the
"SoE Email Server"). These emails were relevant to proving that Brandsway was
terminated for cause. Furthermore, the very fact that Plaintiffs controlled access to SoE
email accounts and refused to relinquish the passwords to these accounts confirms that
Brandsway was properly terminated, as the SoE Email Server was created for SoE
9
10 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
pursuant to the Agreement. Finally, after multiple motions to compel, Plaintiffs finally
"sonsofessexLES.com"
provided passwords to the emails in the SoE email acc0üñts at
via email dated July 27, 2018.
However, upon reviewing the emails contained on the Email Server itwas clear
that years of emails had been deleted from the server, which prevented Delshah from
obtaining copies of them. The fact that these emails were deleted was astonishing in and
of itself, but, worse was the fact that Plaintiffs included (and continue to include) as
exhibits to their motion emails that were no longer on the SoE Email Server. As
Plaintiffs always controlled the SoE Email Server (it was actually a point of contention
before Justice Sherwood in May 2013 during the TRO application oral argument; see, Ex.
K), itis clear that Plaintiffs had printed the emails which they needed and then deleted
the emails, allbefore providing Delshah with the passwords to access the SoE Email
Server. Plaintiffs clearly spoliated evidence.
Astonishingly, on this motion Plaintiffs again submit an email that has been
deleted, proving again that Plaintiffs are deliberately hiding evidence!
Plaintiffs'
V. motion and Delshah's cross-motion.
On the same day that Plaintiffs sent the Email Server passwords, they moved for
liability"
summary judgment "on based solely upon Levine's unsupported factual claims,
much of which was alleged "upon information and belief". Other than Levine's
conclusory allegations, Plaintiffs offered no evidence to support their motion. Plaintiffs
completely ignored that Brandsway had been terminated on multiple grounds, but,
instead they focused solely on Brandsway's failure to meet the required financial metrics.
10
11 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
Plaintiffs'
Delshah cross-moved, inter alia, for summary judgment dismissing
Plaintiffs'
breach of contract and fraud claims based upon admissions, and for an Order
Plaintiffs'
striking the Second Amended Complaint for admitted spoliation of evidence.
Delshah also cross-moved for an Order striking the Second Amended Complaint for
Plaintiffs'
refusal to comply with the Court's June 2018 Conference Order. In support of
itsmotion, Delshah submitted an affidavit from James Choung, SoE's Director of
Operations, who was hired by Brandsway. See, Ex. G.
Mr. Choung set forth specific acts of theft and dishonesty by Plaintiffs, including
taking money to which they were not entitled, and inflating Brandsway's monthly
payment amount. Although Plaintiffs submitted a 37 page diatribe in opposition to
Delshah's cross-motion Plaintiffs did not dispute these specific allegations of theft and
dishonesty. In addition, Plaintiffs admitted that emails were deleted from the SoE Email
Plaintiffs'
Server while in their sole possession and, at oral argument counsel admitted
that Plaintiffs had printed out the emails before the emails were deleted. SJ Order
transcript, 53:10-15; Ex. A.
VI. The February 4, 2019 Decision and Order
On February 4, 2019, the parties appeared for oral argument, at which time the
Plaintiffs'
Court denied motion, and granted Delshah's cross-motion for summary
judgment dismissing Plaintiff's fraud cause of action. SJ Order transcript, 37:4-7; Ex. A.
However, the Court denied Delshah's motion to dismiss the First Cause of Action
for breach of contract, but the Court did acknowledge that Plaintiffs did not offer any
evidence to dispute Delshah's specific factual allegations of theft and dishonesty or even
deny these specific factual allegations. SJ Order transcript, 23:2-5; 25:11-16; Ex. A.
11
12 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
Indeed, Mr. Choung specifically set forth that Plaintiffs had improperly taken $2,500 per
month in excess of Brandsway's monthly payment, and the Court specifically pressed
Plaintiffs'
counsel to explain this specific allegation of theft:
THE COURT: Give me an explanation why you are entitled to the money? Did
your client give an explanation where you are entitled to the extra $2,500 for the
three months?
MR. DECEA: Other than to say he didn't steal any money.
SJ Order transcript, 25:11-16; Ex. A.
Having failed to dispute Delshah's evidence of theft and dishonesty, astoundingly,
Plaintiffs tacitly admitted that their actions were dishonest, but they argued that the
evidence of theft and dishonesty offered by Delshah did not show"sufficient wrongdoing
agreement."
to trigger the provision in the SJ Order transcript, 20:19-23; Ex. A.
In addition, during the oral argument, Plaintiffs admitted that they firstcopied all
of the emails before those emails were deleted! SJ Order transcript, 53:10-15; Ex. A. In
Plaintiffs'
light of admissions that emails were deleted after they were printed out, the
Court granted Delshah's motion for spoliation to the extent of directing that a computer
professional review the SoE Email Server to determine when the emails were deleted and
who deleted those emails.
VH. The instant motion and cross-motion.
Plaintiffs now move for leave to file a Third Amended Complaint, or for leave to
Plaintiffs'
reargue the dismissal of their fraud claim. However, motion is based upon
outright misstatemêñts, it isprocedurally defective, and each proposed cause of action
asserted in the proposed Third Amended Complaint fails as a matter of law and based
12
13 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
upon the facts. Accordingly, Plaintiff's motion should be denied. Furthermore, due to
Plaintiffs'
the egregious nature of dishonesty on thismotion, Delshah moves for an award
attorneys'
of sanctions and fees. In addition, Delshah moves to compel Plaintiffs to
respond to discover propounded on Plaintiffs nearly two years ago, and which the Court
already Ordered to be produced.
ARGUMENT
POINT 1
PLAINTIFFS'
MOTION IS A FRAUD ON THE COURT
Initially, itis clear that Plaintiffs simply lieto the Court, and their level of
dishoñesty is,frankly, infuriating. Plaintiffs slyly attempt to include causes of actions in
their proposed Third Amendment Complaint that were previously dismissed by this Court
and to assert new causes of action based on patent liesand a manufactured a story
Plaintiffs'
designed to explain away Plaintiff's theft of SoE's money. However, prior
admissions conclusively prove their mal intent.
a. Plaintiffs seek to assert new claims, which were previously dismissed.
There can be no dispute that after the Dismissal Order, the only Causes of Action
remaining were the First Cause of Action for breach of contract, and the Third Cause of
Action for fraud. S_ee, Dismissal Order; Ex. B.
Shockingly, on this motion Plaintiffs claim that "[b]y the third amended
complaint Plaintiff's [sic] merely seek to remove from the second amended complaint
those parties dismissed from the action and those causes of action which have either been
dismissed or withdrawn. Decea Aff., $4. Attorney Decea further avers that "[b]y the
relief requested herein, neither the substance nor procedural posture of this case will be
affected."
Decea Aff., 14 (emphasis added). Plaintiffs further state that "[t]he
13
14 of 45
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013
NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019
amendment sought does not seek to add new causes of action or alter the facts upon
based." Plts'
which the causes of action are MoL, page 2 (emphasis added). "The only
Plaintiffs'
substance added to the third amended complaint is to elucidate Third Cause of
forgery." Plts'
Action for fraud by MoL, page 3.
However, a simple review of the Proposed Third Amended Complaiñt shows that
these statements are outright lies, as Plaintiffs now seek to assert additional claims for
breach of fiduciary duty and conversion in the proposed Third Amended Complaint!
Plaintiffs'
Clearly, despite explicit claim to the contrary Plaintiffs are most certainly
seeking to add additional causes of action and additional facts. Plaintiffs are deliberately
misleading the Court, and their behavior is simply outrageous, and itis a fraud on the
Preview
FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 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, -against- DELSHAH CAPITAL LLC, MICHAEL K. SHAH, and VICTOR JUNG Defendants. ____ ___ ___ __ ______ ___________--------X DEFENDANTS' MEMORANDUM OF LAW IN OPPOSITION PLAINTIFFS' TO MOTION TO AMEND OR REARGUE and DEFENDANTS' IN SUPPORT OF CROSS-MOTION FOR ATTORNEYS' FEES AND SANCTIONS AND TO COMPEL Dated: March 29, 2019 Garden City, New York Cordova & Schwartzman, LLP Attorneys for Defendants DELSHAH CAPITAL LLC, MICHAEL K. SHAH 666 Old Country Road, Suite 700 Garden City, New York 11530 (516)741-0070 1 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 INTRODUCTION Defendants DELSHAH CAPITAL LLC ("Delshah Capital") and MICHAEL K. SHAH ("Shah") (Shah and/or Delshah Capital are collectively referred to as "Delshah") Plaintiffs' respectfully submit this memorandum of law in opposition to motion for leave to file a Third Amended Complaint or for leave to reargue, and in support of Delshah's attorneys' cross-motion for fees and costs and to compel Plaintiffs to comply with the Court's disclosure Order. Plaintiffs' As demonstrated below, motion is predicated upon (1) outright Plaintiffs' fabrications such as newly minted claim that the money Plaintiffs stole from Sons of Essex ("SoE") was money due Levine from another restaurant, (2) judicially admitted lies such as Levine's statement that he isand always was a 50% owner of SoE, and (3) outrageous accusations such as the accusation that James Choung, and Victor Jung, both Asian-Americans, impersonated Matthew Levine's likeness. Moreover, while specifically representing to this Court that they are not adding additional claims to the action, Plaintiffs surreptitiously seek to add two additional claims in their Third Amended Complaint! Worse, these additional claims are claims that were previously asserted by Plaintiffs, and that were dismissed with prejudice by this Court, As difficult as it isto write, what Plaintiffs have presented to this Court herein is more than just misleading, itis nothing less than a fraud on the Court. Delshah should not have to bear the cost of opposing this motion due to such egregious behavior and attorneys' Plaintiffs should be directed to pay Delshah's fees and costs for having to oppose this baseless motion. 2 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 Compounding their outrageous behavior, Plaintiffs again submit to the Court an email in support of their motion which was deleted from James Choung's SonsofEssexLES email account. This proves again that Plaintiffs deliberately deleted emails but only after first saving those emails elsewhere. Plaintiffs have spoliated evidence, and then use that same evidence to advance their case. PRELIMINARY STATEMENT This action arises from a restaurant management agreement entered into between Plaintiff Brandsway Hospitality LLC ("Brandsway") and Delshah Capital LLC (the "Agreement") by which Brandsway would operate Delshah's restaurant SoE. The Agreement provided, inter alia, that Delshah Capital could terminate Brandsway in the event of theft or dishonesty by Brandsway, or in the event that the restaurant failed to repay certain loans with interest and also redeem a certain amount of Delshah's preferred equity with interest within a specified time period, or if Brandsway took an action that subjected the restaurant's liquor license to sanction. It isbeyond dispute that Plaintiffs stole from SOE: Delshah presented proof of Plaintiffs' theft from Sons of Essex, which served as a basis to terminate Brandsway for cause, however, Plaintiffs completely ignored Delshah's evidence despite the fact that they submitted a 37 page affidavit in opposition to Delshah's motion. Having failed to refute Delshah's evidence, Plaintiffs now manufacture a story to justify their theft. However, their new story is a complete fabrication easily disproved by their own admissions, and, interestingly, ithas nothing to do with the relief that they seek from the Court on this motion. 2 3 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 Similarly, itis beyond dispute that Delshah's loan, preferred equity, and interest were not repaid as required by the Agament, and, in fact, by email dated January 23, 2013, after the dates these payments were required to be made pursuant to the Agrccment, Plaintiff Matthew Levine ("Levine") acknowledges that the amounts have back." not been repaid, writing "I want him [Shah] to be paid A copy of said email is annexed hereto as Exhibit O. In July 2018, Plaintiff moved for summary judgment on liability, asserting only metrics" that Brandsway met the required "financial even though these sums were not paid to Delshah. Delshah cross-moved to dismiss the two remaining causes of action, for breach of contract and for fraud. Delshah further cross-moved to strike the complaint for Plaintiffs' admitted spoliation of evidence (Plaintiffs admitted that emails were deleted Plaintiffs' after Plaintiffs had printed the emails) and for refusal to comply with the Court's discovery Orders. In the alternative, Delshah moved to compel Plaintiffs to comply with the Court's discovery Orders. By Decision and Order on Motion dated February 4, 2019, the Court granted Plaintiffs' Delshah's cross-motion dismissing fraud cause of action, but denied Delshah's cross-motion to dismiss the breach of contract cause of action. The Court granted Delshah's motion to strike the complaint to the extent of directing that an expert review Plaintiffs' the server in possession to determiñc when the emails were deleted. A copy of the Court's February 4, 2019 Decision and Order on Motion and the relevant portions of the transcript from the oral arguments (collectively, the "SJ Order") are annexed hereto as Exhibit A. The Court did not decide Delshah's motion to compel Plaintiffs to comply with the Court's discovery Orders. 3 4 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 Plaintiffs now move to amend the Second Amended Complaint that they filed in 2014, and they offer a proposed Third Amended Complaint. Shockingly, Plaintiffs claim that "[b]y the third amended cerñplaiñt Plaintiff's [sic] merely seek to remove from the Second Amended Complaint those parties dismissed from the action and those causes of action which have either been dismissed or withdrawn. Affirmation of Thomas B Decea, Esq., dated February 21, 2019 (the "Decea Aff."), ¶4. Plaintiffs further claim that "[b]y the relief requested herein, neither the substance nor procedural posture of this case will affected." be Decea Aff., $4. Plaintiffs also state that "[t]he amendment sought does not seek to add new causes of action or alter the facts upon which the causes of action are based." Plaintiffs' Memorandum of Law in Support ("Plt's MoL"), page 2. However, these statements are demonstrably dishonent, based upon a simple comparison of the Court's prior Order dismissing certain claims and causes of action, the Plaintiffs' Second Amended Complaint, and proposed Third Amended Complaint. In fact, the Court should note that, despite their specific statements to the contrary, Plaintiffs seek to surreptitiously add additional claims to this action, including claims that were specifically dismissed by this Court on motion by Order dated August 6. 2015 (the "Dismissal Order"). A copy of the Dismissal Order with the relevant portions of the transcript from the oral argument is annexed hereto as Exhibit B; see also, NYSCEF Doc No. 275. Plaintiffs are attempting a fraud on the Court. Plaintiffs' Nonetheless, motion fails as a matter of law for a number of reasons, including (1) the law of the case doctrine, (2) the failure to state a claim, and (3) that the claims are predicated on admittedly false allegations. In addition, due to the egregious Plaintiffs' nature of dishonesty, and the fact that Plaintiffs seek to add claims that were 4 5 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 previously dissilssed with prejudice on motion-while specifically denying that they are so-- attorneys' doing Delshah cross-moves for an award of fees and sanctions, and further moves to compel Plaintiffs to respond to previously propounded discovery domsids as per the Court's prior discovery Order. FACTS The facts set forth herein are based upon the affidavits of Michael Shah, sworn to October 10, 2018 (the "Shah Aff.") (NYSCEF Doc. No. 439) and James Choung, sworn to October 10, 2018 (the "Choung October Aff.") (NYSCEF Doc. No. 440), both of Plaintiffs' which were submitted in opposition to summary judgment motion and in support of Delshah's cross-motion for summary judgment. For the Court's convenience, copies of the Shah Aff. and the Choung October Aff. are annexed hereto as Exhibit E and Exhibit G, respectively. Mr. Shah and Mr. Choung also submit affidavits on this motion. L Sons of Essex. In or about November, 2010, Michael Shah's company, non-party Black Label Residential LLC, purchased the retail condominium space located at 133 Essex Street in Manhattan. Shah Aff., $3; Ex E (NYSCEF Doc. No. 439). At that time, the space was occupied by a bar named "Mason Dixon". Shah formed 133 Essex Restaurant, LLC which purchased Mason Dixon's assets, including its liquor license, for $300,000 funded entirely by Shah. Shah then decided to open a restaurant at the property, and between loans and direct capital contributions, Shah spent well in excess of one ($1,000,000.00) million dollars building the restaurant operated by 133 Essex Restaurant, LLC known as Essex" "Sons of ("SoE"). Plaintiffs did not contribute any monev to SoE or make any financial contribution to SoE. 6 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 Shah decided to hire a manager for SoE, and he hired Brandsway to operate the restaurant. Accordingly, Delshah entered into a Management and Operations Agreement (the "Agreement") with Brandsway dated March 9, 2011. A copy of the Agreement is annexed hereto as Exhibit J; NYSCEF Doc. No 411. Pursuant to the terms of the Agreement, Delshah hired Brandsway "to operate and manage the Restaurant for the year," accoüñt of, and on behalf of, [Delshah] on an exclusive basis for one but subject to termination in the event of theft or dishonesty, for failure to achieve certain minimum financial perforniañce, or if Brandsway allowed any actions that potantidy subjected SoE's liquor license to sanction by the New York State Liquor Authority (the "SLA"). As part of the Management Agreement, Brandsway, no_t Levine, would earn a 25% ownership interest in SoE, upon the repayment of monies invested Dekhah by Indeed, in the Second Amended Complaint, Plaintiffs specifically admit that"[u]nder the percentl Management and Operations Agreement, Brsñ Jswãÿ was a thirty-five (35%) owner of Sons of Essex, which ownership interest would vest upon the reoarment of_a h . .. ." SAC; 155; Ex. C (emphasis added). Thus, as Plaintiffs admit that the ownership interest would vest solely upon the paymcñt of Delshah's investment, and as Delshah was never repaid the investment monies, Brandsway's interest never vested. After Delshah discovered multiple acts of theft and dishonesty by Plaintiffs; after the required financial metrics were not achieved; and after Brandsway allowed certain actions that subjected SoE's liquor license to sanction, by letter dated April 24, 2013, I Delshahdisputes that was a 35% member of theentity. In as setforth Braiidsway addition, below, Plaintiffshave judiciallyasillit-:dbefore the Honorable O. Peter Sherwood, J.S.C.,that Brandsway was not a 35% member ofSoE. 6 7 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 Delshah terminated the Agreement for cause (the "Termination Letter"). A copy of the Termination Letter is annexed hereto as Exhibit F. Unfortunately, Levine refused to accept Brandsway's termiñation, and he set out "fired" to destroy SoE. Levine first went to SoE where he employees, and worse, he tried to steal SoE's liquor license, which would have effectively put SoE out of business! Shah Aff., ¶8; Ex E. The liquor license was originally an asset of Mason Dixon, the previous tenant, which Shah bought for $300,000, without any monetary contribution by Plaintiffs. Fortunately, the police prcycnted Levine from leaving SoE and removing the liquor license. Given Levine's actions, Delshah filed the action entitled 133 Essex Restaurant, LLC v. Brandsway Hospitality, Supreme Court, New York County, Index No. Action").2 651629/2013 (the "Related On May 6, 2013, the Honorable O. Peter Sherwood, J.S.C. granted Delshah a restraiñiñg order against Levine restraining him from returning to SoE. A copy of the relevant portions of the transcript from the oral arguments before Justice Sherwood (the "TRO Transcript") are annexed hereto as Exhibit K. This restraining order remains in effect currently, as Plaintiffs have not been involved in any way with SoE in nearly six years. Thereafter, continuing his plan to destroy SoE, Levine filed a complaint with the SLA, asserting that there had occurred serious SLA violations at SoE, but all of the alleged violations occurred while Brandsway was mañaging SoE. Clearly, Levine earth" decided to use "scotched tactics in the hope of destroying SoE. After Levine filed 2 from same before the The Related Action arises the factsand the Agrccmcñt and is cüñêñtly pcñdiñg Court. 7 8 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 his accusations, SoE was subject to a full investigation by the SLA because of these sanction." accusations, and SoE's liquor license was "subject to II. The motions to vacate the Notices of Peñdêñcy and to dismiss/correct the pleadings. On July 26, 2013, rather than filing a counter-claim in the Related Action, Plaintiffs coñüñcñced this action by filing a 240 page prolix Complaint against Delshah, Shah, and forty-plus other parties, including almost every entity Shah has an interest in, regardless of whether Plaintiffs had any dealings with those entities. Plaintiffs sought 20 million dollars in damages arising from Brandsway's 18 month or so tenure! Worse, Plaintiffs filed a number of Notices of Pendency against certain properties owned by Shah's companies, even though Plaintiffs had no claim to those real properties. Thus, Delshah moved to vacate and strike the Notices of Pendency, which motion Court.3 was granted by the Next, because the first filed Complaint contained multiple statements of fact, evidentistry material, and scandalous and outrageous allegations not relevant to the instant matter, Delshah moved to strike it.However, prior to the return date of the motion, Plaintiffs filed an Amended Complaint. Nonetheless, because the Amended Complaint similarly failed to comply with the rules of pleading, Delshah moved to strike the Amended Complaiñt. On May 12, 2014, the Court granted the "unanswerable."4 motion, finding the Amended Complaint to be III. The motions to dismiss. Thereafter, Plaintiffs filed a fifty page Second Amended Complaint (the "SAC") containing twenty-two causes of action against twenty-five or so defendants, including 3 NYSCEF Doc No. 120. 4 NYSCEF Doc No. 168. 8 9 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 claims for fraud, conversion and breach of fiduciary duty! A copy of the Second Amended Complaint is annexed hereto as Exhibit C. These claims are based upon the same allegations Plaintiffs now include in their proposed Third Amended Complaiñt (the "Proposed TAC"). A copy of the proposed Third Amended Complaint is annexed hereto as Exhibit D. After Plaintiffs filed the Second Amended Delshah and the co- Complaint, defendants moved to dismiss the Second Amended Complaint in whole or in part. By Order dated August 6, 2015, the Court granted the motion in part (the "Dismissal Plaintiffs' Order"). Critically, fraud claims based upon, inter alia, the alleged forgery of Levine's signature and the use of his social security number were dismissed witl1 Plaintiffs' prejudice. The Court also dismissed claims for conversion and breach of fiduciary duty with prejudice. See, Ex. B. Despite these specific dismissah, Plaintiffs seek to reassert these claims in their Proposed Third Amended Cornplair.t, under the pretense that they "merely seek to remove....those parties from the action and those withdrawn." causes of action which have either been dismissed or IV. Plaintiffs spoliate evidence. Thereafter, discovery commenced, but Plaintiffs refused to provide certain critical disclosure, and they continually failed to provide access to the email computer server "sonsofessexLES.com" hosting the emails relating to SoE, in the email accounts (the "SoE Email Server"). These emails were relevant to proving that Brandsway was terminated for cause. Furthermore, the very fact that Plaintiffs controlled access to SoE email accounts and refused to relinquish the passwords to these accounts confirms that Brandsway was properly terminated, as the SoE Email Server was created for SoE 9 10 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 pursuant to the Agreement. Finally, after multiple motions to compel, Plaintiffs finally "sonsofessexLES.com" provided passwords to the emails in the SoE email acc0üñts at via email dated July 27, 2018. However, upon reviewing the emails contained on the Email Server itwas clear that years of emails had been deleted from the server, which prevented Delshah from obtaining copies of them. The fact that these emails were deleted was astonishing in and of itself, but, worse was the fact that Plaintiffs included (and continue to include) as exhibits to their motion emails that were no longer on the SoE Email Server. As Plaintiffs always controlled the SoE Email Server (it was actually a point of contention before Justice Sherwood in May 2013 during the TRO application oral argument; see, Ex. K), itis clear that Plaintiffs had printed the emails which they needed and then deleted the emails, allbefore providing Delshah with the passwords to access the SoE Email Server. Plaintiffs clearly spoliated evidence. Astonishingly, on this motion Plaintiffs again submit an email that has been deleted, proving again that Plaintiffs are deliberately hiding evidence! Plaintiffs' V. motion and Delshah's cross-motion. On the same day that Plaintiffs sent the Email Server passwords, they moved for liability" summary judgment "on based solely upon Levine's unsupported factual claims, much of which was alleged "upon information and belief". Other than Levine's conclusory allegations, Plaintiffs offered no evidence to support their motion. Plaintiffs completely ignored that Brandsway had been terminated on multiple grounds, but, instead they focused solely on Brandsway's failure to meet the required financial metrics. 10 11 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 Plaintiffs' Delshah cross-moved, inter alia, for summary judgment dismissing Plaintiffs' breach of contract and fraud claims based upon admissions, and for an Order Plaintiffs' striking the Second Amended Complaint for admitted spoliation of evidence. Delshah also cross-moved for an Order striking the Second Amended Complaint for Plaintiffs' refusal to comply with the Court's June 2018 Conference Order. In support of itsmotion, Delshah submitted an affidavit from James Choung, SoE's Director of Operations, who was hired by Brandsway. See, Ex. G. Mr. Choung set forth specific acts of theft and dishonesty by Plaintiffs, including taking money to which they were not entitled, and inflating Brandsway's monthly payment amount. Although Plaintiffs submitted a 37 page diatribe in opposition to Delshah's cross-motion Plaintiffs did not dispute these specific allegations of theft and dishonesty. In addition, Plaintiffs admitted that emails were deleted from the SoE Email Plaintiffs' Server while in their sole possession and, at oral argument counsel admitted that Plaintiffs had printed out the emails before the emails were deleted. SJ Order transcript, 53:10-15; Ex. A. VI. The February 4, 2019 Decision and Order On February 4, 2019, the parties appeared for oral argument, at which time the Plaintiffs' Court denied motion, and granted Delshah's cross-motion for summary judgment dismissing Plaintiff's fraud cause of action. SJ Order transcript, 37:4-7; Ex. A. However, the Court denied Delshah's motion to dismiss the First Cause of Action for breach of contract, but the Court did acknowledge that Plaintiffs did not offer any evidence to dispute Delshah's specific factual allegations of theft and dishonesty or even deny these specific factual allegations. SJ Order transcript, 23:2-5; 25:11-16; Ex. A. 11 12 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 Indeed, Mr. Choung specifically set forth that Plaintiffs had improperly taken $2,500 per month in excess of Brandsway's monthly payment, and the Court specifically pressed Plaintiffs' counsel to explain this specific allegation of theft: THE COURT: Give me an explanation why you are entitled to the money? Did your client give an explanation where you are entitled to the extra $2,500 for the three months? MR. DECEA: Other than to say he didn't steal any money. SJ Order transcript, 25:11-16; Ex. A. Having failed to dispute Delshah's evidence of theft and dishonesty, astoundingly, Plaintiffs tacitly admitted that their actions were dishonest, but they argued that the evidence of theft and dishonesty offered by Delshah did not show"sufficient wrongdoing agreement." to trigger the provision in the SJ Order transcript, 20:19-23; Ex. A. In addition, during the oral argument, Plaintiffs admitted that they firstcopied all of the emails before those emails were deleted! SJ Order transcript, 53:10-15; Ex. A. In Plaintiffs' light of admissions that emails were deleted after they were printed out, the Court granted Delshah's motion for spoliation to the extent of directing that a computer professional review the SoE Email Server to determine when the emails were deleted and who deleted those emails. VH. The instant motion and cross-motion. Plaintiffs now move for leave to file a Third Amended Complaint, or for leave to Plaintiffs' reargue the dismissal of their fraud claim. However, motion is based upon outright misstatemêñts, it isprocedurally defective, and each proposed cause of action asserted in the proposed Third Amended Complaint fails as a matter of law and based 12 13 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 upon the facts. Accordingly, Plaintiff's motion should be denied. Furthermore, due to Plaintiffs' the egregious nature of dishonesty on thismotion, Delshah moves for an award attorneys' of sanctions and fees. In addition, Delshah moves to compel Plaintiffs to respond to discover propounded on Plaintiffs nearly two years ago, and which the Court already Ordered to be produced. ARGUMENT POINT 1 PLAINTIFFS' MOTION IS A FRAUD ON THE COURT Initially, itis clear that Plaintiffs simply lieto the Court, and their level of dishoñesty is,frankly, infuriating. Plaintiffs slyly attempt to include causes of actions in their proposed Third Amendment Complaint that were previously dismissed by this Court and to assert new causes of action based on patent liesand a manufactured a story Plaintiffs' designed to explain away Plaintiff's theft of SoE's money. However, prior admissions conclusively prove their mal intent. a. Plaintiffs seek to assert new claims, which were previously dismissed. There can be no dispute that after the Dismissal Order, the only Causes of Action remaining were the First Cause of Action for breach of contract, and the Third Cause of Action for fraud. S_ee, Dismissal Order; Ex. B. Shockingly, on this motion Plaintiffs claim that "[b]y the third amended complaint Plaintiff's [sic] merely seek to remove from the second amended complaint those parties dismissed from the action and those causes of action which have either been dismissed or withdrawn. Decea Aff., $4. Attorney Decea further avers that "[b]y the relief requested herein, neither the substance nor procedural posture of this case will be affected." Decea Aff., 14 (emphasis added). Plaintiffs further state that "[t]he 13 14 of 45 FILED: NEW YORK COUNTY CLERK 03/29/2019 05:58 PM INDEX NO. 652637/2013 NYSCEF DOC. NO. 618 RECEIVED NYSCEF: 03/29/2019 amendment sought does not seek to add new causes of action or alter the facts upon based." Plts' which the causes of action are MoL, page 2 (emphasis added). "The only Plaintiffs' substance added to the third amended complaint is to elucidate Third Cause of forgery." Plts' Action for fraud by MoL, page 3. However, a simple review of the Proposed Third Amended Complaiñt shows that these statements are outright lies, as Plaintiffs now seek to assert additional claims for breach of fiduciary duty and conversion in the proposed Third Amended Complaint! Plaintiffs' Clearly, despite explicit claim to the contrary Plaintiffs are most certainly seeking to add additional causes of action and additional facts. Plaintiffs are deliberately misleading the Court, and their behavior is simply outrageous, and itis a fraud on the